Fortnightly - New England Electric Systemhttps://www.fortnightly.com/tags/new-england-electric-system
enPeople (April 2011)https://www.fortnightly.com/fortnightly/2011/04/people-april-2011
<div class="field field-name-field-import-category field-type-text field-label-inline clearfix"><div class="field-label">Category:&nbsp;</div><div class="field-items"><div class="field-item even">People</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - April 2011</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p><span class="boldred">New Opportunities: </span> Puget Sound Energy’s board of directors elected <b>Kimberly Harris</b> CEO. Prior to being named president of PSE in June 2010, Harris served as executive v.p. and chief resource officer beginning in 2007. Harris succeeds <b>Steve Reynolds</b>, who retired after heading the utility since 2002.</p>
<p><b>Baltimore Gas &amp; Electric</b> (BGE) promoted <b>Jeannette M. Mills</b> to the newly created position of chief customer officer (CCO). Mills was senior vice president of customer relations and account services.</p>
<p><b>Peter J. Kotsenas</b> was promoted to v.p. of east fleet operations, for Akron, Ohio-based FirstEnergy Corp. He was a power plant regional director for Allegheny Energy, and assumed his new position after FirstEnergy and Allegheny completed their merger.</p>
<p><b>Pacific Gas and Electric</b> appointed <b>Kenneth J. Peters</b> as v.p. of engineering services, Diablo Canyon Power Plant. Most recently, Peters served as the plant’s senior director of engineering services.</p>
<p><b>Central Vermont Public Service</b> named <b>Larry Reilly</b> president. Reilly is the former president of distribution companies at New England Electric System and executive v.p. at National Grid.</p>
<p><b>Constellation Energy</b> announced that <b>Michael D. Smith</b> will lead solar sales and green initiatives for the company’s competitive retail energy businesses. Smith previously served as v.p. and director of Constellation Energy’s international energy policy office in London.</p>
<p><b>The Empire District Electric Company</b> elected <b>Brad Beecher</b> to the position of president and CEO, effective June 1, 2011. Other elections include, <b>Kelly S.Walters</b>, v.p. and CEO of electric, <b>Michael E. Palmer</b>, v.p. of transmission policy and corporate services, and <b>Martin O. Penning</b>, v.p. of commercial operations.</p>
<p><b>Wisconsin Energy Corp.</b> promoted <b>Allen Leverett</b>, currently the company’s CFO, to president and CEO of We Generation. <b>Frederick (Rick) Kuester</b>, currently president and CEO of We Generation, will become CFO of Wisconsin Energy.</p>
<p><b>The Tennessee Valley Authority</b> named <b>Dave Stinson</b> v.p. for the Watts Bar Nuclear Plant Unit 2 construction project. Stinson is a former recovery manager for TVA’s Browns Ferry Nuclear Plant Unit 3.</p>
<p><b>Ameren</b> announced that <b>Charles D. Naslund</b>, <b>Gregory L. Nelson</b> and <b>Steven R. Sullivan</b> will assume new positions. Naslund moved to the role of senior v.p., generation and environmental projects, at Ameren Missouri; and Sullivan replaced Naslund as chairman, president and CEO, Ameren Energy Resources Co. Replacing Sullivan as Ameren’s general counsel is Nelson, who became senior v.p. and general counsel.</p>
<p><b>PJM Interconnection</b> promoted <b>Denise Foster</b> to v.p. of state and member services. Foster previously was state and member services’ executive director.</p>
<p><b>The New York State Smart Grid Consortium</b> named <b>David J. Manning</b> as its first executive director. Manning is senior v.p. for engineering firm Vanasse Hangen Brustlin, and formerly was executive v.p. and chief environmental officer for KeySpan (now National Grid).</p>
<p><b>The Midwest Energy Efficiency Alliance</b> named <b>Jay Wrobel</b> as its new executive director. Wrobel previously served as MEEA’s director of programs, and was with the Gas Technology Institute and Cambridge Energy Research Associates before that.</p>
<p> </p>
<p><span class="boldred">Boards of Directors: Sempra Energy elected <b>Alan L. Boeckmann</b> to the company’s board of directors. Boeckmann currently serves as the non-executive chairman of the board of directors for Fluor Corp.</span></p>
<p><strong>Xcel Energy</strong> announced that <b>James J. Sheppard</b> has been elected to the company’s board of directors. From 1993 to 2009, Sheppard was president and CEO of STO Nuclear Operating Co., which operates the South Texas Project nuclear power plant. He also served as chief nuclear officer for Southern California Edison.</p>
<p> </p>
<p><i>We welcome submissions to People, especially those accompanied by a high-resolution color photograph. E-mail to: <a href="mailto:people@pur.com">people@pur.com</a>.</i></p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/people">People</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/people">People</a></li></ul></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="https://www.fortnightly.com/sites/default/files/article_images/1104/images/1104-FR.jpg" width="1116" height="1500" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/alan-l-boeckmann">Alan L. Boeckmann</a><span class="pur_comma">, </span><a href="/tags/allegheny-energy">Allegheny Energy</a><span class="pur_comma">, </span><a href="/tags/allen-leverett">Allen Leverett</a><span class="pur_comma">, </span><a href="/tags/ameren">Ameren</a><span class="pur_comma">, </span><a href="/tags/bge">BGE</a><span class="pur_comma">, </span><a href="/tags/brad-beecher">Brad Beecher</a><span class="pur_comma">, </span><a href="/tags/central-vermont-public-service">Central Vermont Public Service</a><span class="pur_comma">, </span><a href="/tags/charles-d-naslund">Charles D. Naslund</a><span class="pur_comma">, </span><a href="/tags/constellat">Constellat</a><span class="pur_comma">, </span><a href="/tags/constellation">Constellation</a><span class="pur_comma">, </span><a href="/tags/constellation-energy">Constellation Energy</a><span class="pur_comma">, </span><a href="/tags/dave-stinson">Dave Stinson</a><span class="pur_comma">, </span><a href="/tags/david-j-manning">David J. Manning</a><span class="pur_comma">, </span><a href="/tags/denise-foster">Denise Foster</a><span class="pur_comma">, </span><a href="/tags/diablo-canyon-power-plant">Diablo Canyon Power Plant</a><span class="pur_comma">, </span><a href="/tags/empire-district-electric">Empire District Electric</a><span class="pur_comma">, </span><a href="/tags/empire-district-electric-company">Empire District Electric Company</a><span class="pur_comma">, </span><a href="/tags/firstenergy">FirstEnergy</a><span class="pur_comma">, </span><a href="/tags/firstenergy-corp">FirstEnergy Corp.</a><span class="pur_comma">, </span><a href="/tags/fluor">Fluor</a><span class="pur_comma">, </span><a href="/tags/fluor-corp">Fluor Corp.</a><span class="pur_comma">, </span><a href="/tags/ge">GE</a><span class="pur_comma">, </span><a href="/tags/gregory-l-nelson">Gregory L. Nelson</a><span class="pur_comma">, </span><a href="/tags/interconnection">Interconnection</a><span class="pur_comma">, </span><a href="/tags/james-j-sheppard">James J. Sheppard</a><span class="pur_comma">, </span><a href="/tags/jay-wrobel">Jay Wrobel</a><span class="pur_comma">, </span><a href="/tags/kenneth-j-peters">Kenneth J. Peters</a><span class="pur_comma">, </span><a href="/tags/kimberly-harris">Kimberly Harris</a><span class="pur_comma">, </span><a href="/tags/larry-reilly">Larry Reilly</a><span class="pur_comma">, </span><a href="/tags/martin-o-penning">Martin O. Penning</a><span class="pur_comma">, </span><a href="/tags/michael-d-smith">Michael D. Smith</a><span class="pur_comma">, </span><a href="/tags/michael-e-palmer">Michael E. Palmer</a><span class="pur_comma">, </span><a href="/tags/midwest-energy-efficiency-alliance">Midwest Energy Efficiency Alliance</a><span class="pur_comma">, </span><a href="/tags/national-grid">National Grid</a><span class="pur_comma">, </span><a href="/tags/new-england-electric-system">New England Electric System</a><span class="pur_comma">, </span><a href="/tags/new-york-state-smart-grid-consortium">New York State Smart Grid Consortium</a><span class="pur_comma">, </span><a href="/tags/nuclear">Nuclear</a><span class="pur_comma">, </span><a href="/tags/pacific-gas-and-electric">Pacific Gas and Electric</a><span class="pur_comma">, </span><a href="/tags/peter-j-kotsenas">Peter J. Kotsenas</a><span class="pur_comma">, </span><a href="/tags/pjm">PJM</a><span class="pur_comma">, </span><a href="/tags/pjm-interconnection">PJM Interconnection</a><span class="pur_comma">, </span><a href="/tags/puget-sound-energy">Puget Sound Energy</a><span class="pur_comma">, </span><a href="/tags/sempra">Sempra</a><span class="pur_comma">, </span><a href="/tags/sempra-energy">Sempra Energy</a><span class="pur_comma">, </span><a href="/tags/southern-california-edison">Southern California Edison</a><span class="pur_comma">, </span><a href="/tags/steven-r-sullivan">Steven R. Sullivan</a><span class="pur_comma">, </span><a href="/tags/technology">Technology</a><span class="pur_comma">, </span><a href="/tags/tennessee-valley-authority-0">Tennessee Valley Authority</a><span class="pur_comma">, </span><a href="/tags/tva">TVA</a><span class="pur_comma">, </span><a href="/tags/vanasse-hangen-brustlin">Vanasse Hangen Brustlin</a><span class="pur_comma">, </span><a href="/tags/watts-bar-nuclear-plant">Watts Bar Nuclear Plant</a><span class="pur_comma">, </span><a href="/tags/we-generation">We Generation</a><span class="pur_comma">, </span><a href="/tags/wisconsin-energy-corp">Wisconsin Energy Corp.</a><span class="pur_comma">, </span><a href="/tags/xcel-energy">Xcel Energy</a> </div>
</div>
Fri, 01 Apr 2011 04:00:00 +0000puradmin14069 at https://www.fortnightly.comPeoplehttps://www.fortnightly.com/fortnightly/2006/11/people
<div class="field field-name-field-import-category field-type-text field-label-inline clearfix"><div class="field-label">Category:&nbsp;</div><div class="field-items"><div class="field-item even">People</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - November 2006</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p><span class="boldred">New Opportunities: </span><b>Public Service Enterprise Group</b> (PSEG) announced the election of <b>Ralph Izzo</b> as president and COO of the company and also as a member of the board of directors. The action positions Izzo to become CEO upon the retirement of <b>E. James Ferland</b>, planned for March 31, 2007. The board also elected <b>Ralph LaRossa</b> to succeed Izzo as president and COO of PSEG’s utility business, Public Service Electric and Gas Co. LaRossa has been PSE&amp;G’s vice president-electric delivery.</p>
<p><b>WGL Holdings Inc.</b>, and its subsidiary, Washington Gas Light Co., announced the election of two new corporate officers. <b>Douglas Staebler</b> was named vice president of engineering and construction, and <b>Lauren Foley</b> was elected vice president of consumer services. Staebler succeeds <b>Thomas Bonner</b>, currently vice president of engineering and construction, who is retiring effective Nov. 1. Staebler joined Washington Gas in 2005. Foley joined Washington Gas in 2002. She will succeed <b>Jim White</b>, currently vice president of consumer services. White left the company on Oct. 13. His retirement becomes effective in February 2007.</p>
<p><b>ISO New England Inc.</b> announced the election of two new board members: <b>Richard A. Abdoo</b>, former Chairman and CEO of Wisconsin Energy Corp., and <b>Paul F. Levy</b>, president and CEO of Beth Israel Deaconess Medical Center. They replace former chairman <b>William W. Berry</b> and current vice chairman <b>Kenneth R. Leibler</b>, both of whom stepped down.</p>
<p><b>Entergy Corp.</b> announced that its board of directors elected <b>Gary W. Edwards</b>, an independent Entergy board member, to the position of presiding director. The board initiated this process following the election of <b>J. Wayne Leonard</b> to the position of chairman and CEO.</p>
<p><b>FirstEnergy Corp.</b> elected <b>James F. Pearson</b>, formerly treasurer, to vice president and treasurer; <b>Eugene J. Sitarz</b>, formerly director, tax department, to vice president, tax; <b>Frank A. Lubich</b>, formerly director, <b>W. H. Sammis Plant</b>, to plant vice president; and <b>Brian J. Warnaka</b>, formerly director, <b>Bruce Mansfield Plant</b>, to plant vice president.</p>
<p><b>Atlanta Gas Light</b> promoted <b>Wendell Dallas Jr.</b> to vice president and general manager. Dallas has served as general manager of Atlanta Gas Light since April 2005.</p>
<p><b>Constellation Energy</b> promoted <b>Charles A. Berardesco</b> to vice president. He will continue to serve as associate general counsel, chief compliance officer, and corporate secretary. He joined the company in January 2003.</p>
<p><b>ComEd’s</b> board of directors appointed Chicago Urban League President and CEO <b>James W. Compton</b> to the utility’s board. With the addition of Compton, the ComEd board has six directors, including five outside directors.</p>
<p><b>Christine King</b>, CEO of <b>AMI Semiconductor</b> (AMIS), was elected to the IDACORP and Idaho Power boards of directors. Prior to joining AMIS, King was vice president of semiconductor products for IBM’s microelectronics division.</p>
<p> </p>
<p><span class="boldred">Retired: </span><b>Rod Mundy</b> retired as senior vice president and counsel of <b>Alabama Power</b>, where he served for eight years.</p>
<p> </p>
<p><span class="boldred">Resigned: </span><b>National Grid</b> said that <b>Mike Jesanis</b>, group director responsible for U.S. distribution, would leave at the end of the year. Jesanis joined New England Electric System in 1983 and has been part of National Grid since it acquired NEES in 2000.</p>
<p> </p>
<p><span class="boldred">Awarded: </span><b>Dr. Neville Holt</b>, a coal gasification expert for the <b>Electric Power Research Institute</b>, received a Lifetime Achievement Award from the Gasification Technologies Council.</p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/people">People</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/people">People</a></li></ul></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="https://www.fortnightly.com/sites/default/files/article_images/0611/images/0611-cvr.jpg" width="1121" height="1500" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/alabama-power">Alabama Power</a><span class="pur_comma">, </span><a href="/tags/ami">AMI</a><span class="pur_comma">, </span><a href="/tags/comed">ComEd</a><span class="pur_comma">, </span><a href="/tags/constellat">Constellat</a><span class="pur_comma">, </span><a href="/tags/constellation">Constellation</a><span class="pur_comma">, </span><a href="/tags/constellation-energy">Constellation Energy</a><span class="pur_comma">, </span><a href="/tags/electric-power-research">Electric Power Research</a><span class="pur_comma">, </span><a href="/tags/electric-power-research-institute">Electric Power Research Institute</a><span class="pur_comma">, </span><a href="/tags/entergy">Entergy</a><span class="pur_comma">, </span><a href="/tags/firstenergy">FirstEnergy</a><span class="pur_comma">, </span><a href="/tags/firstenergy-corp">FirstEnergy Corp.</a><span class="pur_comma">, </span><a href="/tags/gasification">Gasification</a><span class="pur_comma">, </span><a href="/tags/ibm">IBM</a><span class="pur_comma">, </span><a href="/tags/idacorp">IDACORP</a><span class="pur_comma">, </span><a href="/tags/idaho-power">Idaho Power</a><span class="pur_comma">, </span><a href="/tags/iso">ISO</a><span class="pur_comma">, </span><a href="/tags/iso-new-england">ISO New England</a><span class="pur_comma">, </span><a href="/tags/national-grid">National Grid</a><span class="pur_comma">, </span><a href="/tags/nee">NEE</a><span class="pur_comma">, </span><a href="/tags/new-england-electric-system">New England Electric System</a><span class="pur_comma">, </span><a href="/tags/public-service-electric-and-gas">Public Service Electric and Gas</a><span class="pur_comma">, </span><a href="/tags/public-service-enterprise-group">Public Service Enterprise Group</a><span class="pur_comma">, </span><a href="/tags/wgl-holdings">WGL Holdings</a><span class="pur_comma">, </span><a href="/tags/wisconsin-energy-corp">Wisconsin Energy Corp.</a> </div>
</div>
Wed, 01 Nov 2006 05:00:00 +0000puradmin13998 at https://www.fortnightly.comPlants for Sale: Pricing the New Wavehttps://www.fortnightly.com/fortnightly/2004/02/plants-sale-pricing-new-wave
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Financial players and load-serving utilities are looking for power asset deals.</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>David Haarmeyer, Mark Griffith, and Grant Thain</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - February 2004</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><blockquote><h3>Financial players and load-serving utilities are looking for power asset deals.</h3>
</p>
<p>Despite talk of wide bid-ask spreads in the past two tumultuous years, some 60 sales of generation assets have been announced. These sales cover more than 22 GW of capacity, valued on a cash-and-debt basis at approximately $11 billion. A wide variety of buyers and sellers have participated in the sales activity, with a pronounced entry by financial players (investment banks and private equity firms) and load-serving entities (LSEs) looking for capacity to serve their load. All plant types-gas-fired, combined-cycle gas turbines (CCGT), simple-cycle gas turbines (SC), cogeneration (cogen), coal, nuclear, hydro, and wind-have been bought and sold.<sup>1</sup></p>
<p>The systemic capacity overbuild across North America has not led to the expected fire sales. Indeed, the average $/kW values for capacity in many cases are below new build costs, but not substantially. Two explanations stand out: Many of the plants sold have attractive power-supply contracts, and a large number of the merchant plants with little or no equity value are either not finding buyers or are being withheld from the market until prices recover. Hence, we are likely seeing the early stage of an asset-sales wave. In fact, recent sales reflect an uptick in activity.</p>
<p>Future transaction activity is likely to accelerate. The key drivers for asset sales remain robust: About 60 GW of capacity on the block, power prices in many regions that are unlikely to recover until 2010, and increased financial pressures on a number of merchant and diversified energy companies. Moreover, the ranks of potential buyers are growing as credit-risk-shy utilities show a preference for asset ownership over power purchase contracts, and financial players step into the vacuum.</p>
<h3>Sales Prices</h3>
<p>Generation asset sales during the past two years have covered every type of power plant. As indicated in Figure 1, CCGT assets have been the predominant leader with seven separate transactions representing more than a third of total megawatt capacity sold and total dollar value.<sup>2</sup> The average dollar value for CCGT capacity is $495/kW. This high value is related to the profile of asset buyers, which are generally either LSEs or have long-term purchase agreements with creditworthy power purchasers.</p>
<p>Five separate nuclear plant transactions have occurred during this time, two representing British Energy's exit from the North American market after experiencing severe distress in its home market in the United Kingdom. Though difficult to precisely value given complex terms and conditions (e.g., transfer of decommissioning funds), the average value of nuclear capacity is $485/kW. Picking up an efficient plant (95 percent capacity factor), with attractive power purchase contracts and room for synergies with a neighboring plant, Constellation Power's purchase of RG&amp;E's Ginna station for around $800/kW helped to bring up the average (see Figure 1 on p. 48).</p>
<p>Cogen plants account for the greatest number of the transactions and have gained favor because of strong contract positions and favorable regulatory status under the Public Utility Regulatory Policies Act (PURPA). While accounting for more than 15 percent of total capacity sold, cogen plants accounted for almost 30 percent of the total dollar value. By far, financial players have been the most significant buyers of this type of plant-accounting for more than 70 percent of the transactions. Cogen capacity has been the third most highly valued form of capacity after wind and hydro, at around $750/kW.</p>
<p>Coal transactions made up around 15 percent of the total capacity sold and less than 10 percent of the dollar value of the transactions. While in the prior wave of generation asset sales, coal values peaked in the $700/kW range, the average value of transactions thus far is $415/kW. Buyers of coal plants have been primarily large diversified energy companies such as Sempra and Dominion, buying plants in markets adjacent to their regulated franchises.</p>
<p>Simple-cycle gas turbine plant sales comprised a small volume of total capacity sold and dollar sales value. The average value for capacity was $360/kW. The relatively high average value may be explained in part by the buyers' motivations and resource needs. Two-thirds of the buyers were LSEs, with the majority of these either co-ops or municipal utilities.</p>
<p>Transactions involving wind capacity have been on the rise, edging out hydro, the other main renewable power source. The lack of available public information on wind transactions has made it difficult to put a dollar value on the cumulative value of deals. Of those made public, transactions have ranged between $600/kW to $1500/kW. Three hydro deals came in at an average $880/kW, the second highest value for capacity. Such value is largely consistent with the supply-constrained nature of this resource.</p>
<h3>Where Are the Transactions Occurring?</h3>
<p>The Northeast Power Coordinating Council (NPCC) is by far the region with the most asset sales activity over the past two years. As shown in Figure 2 on p . 49, the region's 11 transactions accounted for about 50 percent of the total megawatt capacity sold and 45 percent of the proceeds raised. The region's higher average capacity value-$700/kW-is attributable largely to high-priced nuclear deals, hydro, and a few rich cogen plants.</p>
<p>In terms of capacity sold, the Mid-Atlantic Coordinating Council (MAAC) and Western Electricity Coordinating Council (WECC) follow with around 15 percent and 10 percent, respectively. The WECC values are somewhat understated given that almost all wind capacity sold in the last two years occurred in this region, and these values are not included. The average capacity sales values are $515/kW in MACC and $640/kW in WECC. The higher values may be explained by active participation in both regions by financial players (targeting cogen capacity) and LSEs.</p>
<p>The NPCC, MACC, and WECC (especially California), with high electricity prices, were at the center of early efforts to deregulate and restructure. Driving the first wave of asset sales was the promise of stranded asset recovery with divestiture. In September 1997, New England Electric System (NEES) kicked off the trend with the auction of 4,000 MW. PG&amp;E's $1.6 billion purchase of NEES's capacity, at just over $400/kW for a technology and fuel-diversified portfolio, drew both applause as a gutsy first-mover strategy and criticism as an example of the "winner's curse." Today, PG&amp;E's National Energy Group subsidiary, which owns the NEES and other assets, is in Chapter 11 bankruptcy.</p>
<p>Significant overbuild conditions explain the dearth of sales in other regions. That is especially the case for uncontracted merchant plants in Electric Reliability Council of Texas, East Central Area Reliability Coordinating Agreement, and Southwest Power Pool. In each of these regions sellers received less than $400 per average kilowatt of capacity. The Florida Reliability Coordinating Council, with lower reserve margins, has few transactions, but the two that have occurred have netted high values, averaging $700/kW.</p>
<h3>The Players</h3>
<p>As expected, of the 30 sellers of generation capacity, almost 80 percent were either merchant energy companies or diversified energy companies with merchant businesses. Merchants and diversified energy companies tend to be either exiting merchant generation altogether (e.g., Aquila, El Paso, and Wisconsin Energy), or nominally refocusing on their core utility operations. The top five capacity-selling companies accounted for around 60 percent of the total megawatts sold-selling more than 13 GW of capacity in 11 deals valued at more than $6.5 billion (see Figure 3, p. 49).</p>
<p>Sellers include companies that have experienced severe financial distress during the past two years. But except for Mirant, companies that were unable to restructure voluntarily and were forced into Chapter 11 have sold little capacity. Two notable examples of this are NEG and NRG. Inability to execute asset sales has been in part a source of liquidity problems that are now falling on lenders' shoulders. Thus far, the announced sale of the McClain CCGT plant in Oklahoma by NRG's project lenders is the only transaction related to a bankruptcy proceeding.</p>
<p>On the buy side, more than 30 companies have been active. The top 5 buyers of capacity accounted for more than 60 percent of capacity bought in 10 deals valued at more than $7 billion (see Figure 4). Unlike sellers, buyers have a more evenly mixed profile. Nine buyers have been active in more than one purchase, with Dominion and Brascan Corp., the Canadian financial and real estate company, each involved in three deals.</p>
<p>As a business group, diversified energy companies were the most active buyers. Ten diversified energy companies, in 14 transactions, purchased about 55 percent of the capacity sold. While difficult to delineate clearly, it appears that the vast majority of the capacity purchased was not to serve load within their own utility territory.</p>
<p>Overall, two trends stand out:</p>
<ul>
<li>Financial players have stepped in-10 buyers, in 16 transactions, purchased more than 30 percent of the total capacity and are the lead buyers in terms on a dollar value basis ($5 billion).<sup>3</sup> Goldman Sachs' two transactions-the Linden, N.J., cogen plant and the Cogentrix portfolio-account for almost 60 percent of the capacity purchased by financial players. As indicated in Figure 4, the company is the number-one buyer in terms of dollar value and number-two purchaser of capacity. Power purchase contracts, with credible counterparties, are the key criteria in both of Goldman's transactions. As Goldman's Managing Director Doug Kimmelman noted in reference to the Cogentrix deal, "The value is in the long-dated offtake contracts, not in the steel."<sup>4</sup> Goldman brings capabilities that are currently short in the power market, including a strong balance sheet, credit risk analysis skills, and an energy-trading platform. These offer the firm an important advantage in making good acquisitions and then leveraging their value.</li>
<li>Taking a smaller but noticeable bite were LSEs, which purchased around 10 percent of the capacity in 11 deals for more than $1 billion. Thomas Chewning, Dominion's CFO, recently pointed out the motivations for this trend: "While wholesale electricity prices are depressed, the regulated retail prices that Dominion's competitive operation seeks to beat haven't come down. Dominion is skipping the middle man by selling its power to its own customers rather than to other competitive suppliers and utilities. <sup>5</sup> (italics added).</li>
</ul>
<p>This acquisition strategy faces an important hurdle. In mid-December, FERC ordered a hearing to review OGE's announced purchase of the McClain power plant. OGE plans to fold the plant into its rate base. FERC is concerned the transaction may give OGE too much market power.</p>
<h3>Future Trends</h3>
<p>The last two years have been overwhelmingly bad for many power plant owners and their financial backers. Reserve margins and power prices seem unlikely to improve in the near term for most regions, or even in the medium term for many regions. These are entirely different circumstances from those at the start of the earlier generation asset-sale wave (1997-2001), when the promise of deregulation initiated the sector's boom-bust cycle.</p>
<p>What do the present market conditions mean for future asset-sale activity? Six factors are driving an accelerated pace of asset sales and increasingly downward pressure on the prices of capacity:</p>
<ul>
<li>More than 60 GW of capacity on the block includes a number of large portfolios-AEP Texas generation, El Paso, TXU, and Entergy;</li>
<li>Developers and financiers of capacity coming on line are likely to exit their investment (e.g., Exelon's turnover of its Boston Generating Co. assets to BNP Paribas);</li>
<li>Power purchase contracts, many above market, will be rolling off in the near term, creating a buyer's market for power and a capacity-owner's nightmare;<sup>6</sup></li>
<li>The writedown of assets to market value, as required by accounting rules, will help narrow the bid-ask spread;</li>
<li>Financial-distress fatigue will take its toll. The financial wherewithal and patience of many distressed owners and new owner banks are likely to wear thin; and</li>
<li>Old and inefficient capacity in the rate base is not likely to be retired any time soon. Indeed, this capacity is likely to grow as a result of transfers into the rate base of capacity owned by unregulated affiliates, as well as newly acquired or built plants.<sup>7</sup></li>
</ul>
<p>Strategically, buyers going forward likely will continue making acquisition decisions based on the credit quality of the existing off-take contracts, or on their ability to sign contracts with credible counterparties. Such a strategy is largely a response to the present business environment-characterized by illiquid wholesale power markets, regulatory uncertainty, a heightened sense of credit risk, and the financially weak state of many energy companies. This environment favors investment banks with capabilities to measure, bear, and transfer risk; other financial players with access to capital (e.g., private equity firms); and financially healthy utilities with retail load to support.</p>
<p><b><i class="endnote">Endnotes</i></b></p>
<ol>
<li>This study does not claim to have accounted for all transactions over the past two years, but is rather a best effort attempt to track all publicly disclosed deals. All information used in the analysis is public. Information on terms and conditions of sales is not complete for all transactions. In particular, the existence, value, and length of power purchase contracts attached to deals or signed thereafter is not consistently available. Consequently, it is difficult to say how many, if any, transactions are "pure merchant" deals. This study also does not include the transfer of assets from project sponsors to the lenders and other investors. Information was sourced from company press releases, SEC filings, and news stories. In total, there were 44 transactions where megawatt capacity sold and dollar value information were available. An additional eight deals were identified but without sufficient details on either sales price or capacity sold. Finally, eight wind transactions were identified, but only two with sale prices.</li>
<li>Due to a few large or geographically diverse portfolios (e.g., ArcLight's purchase of Aquila assets and Goldman Sachs' purchase of Cogentrix), which make it difficult to value individual plants sold, the data used for both this discussion and the next on sales by region does not cover the full 42 transactions.</li>
<li>This level of participation is understated given that financial players made up six of the nine sales with insufficient information on dollar value or megawatt capacity.</li>
<li>Dow Jones, Oct. 21, 2003.</li>
<li>Dow Jones, Oct. 27, 2003.</li>
<li>For example, on Oct. 31, 2003, Reliant announced it had updated its estimate of the fair market value of its wholesale energy business. The update was triggered by SFAS No. 142, which requires goodwill to be tested periodically. At the same time, Reliant announced that its evaluation "could lead to decisions to mothball, retire or dispose of assets."</li>
<li>For example, the state Public Service Commission recently gave Wisconsin Energy the green light to build two 615-MW coal plants in Oak Creek, at a cost of $2.15 billion. The price looks right-the commission endorsed a return on equity for the utility of 12.7 percent a year.</li>
</ol>
<hr />
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</div></div></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
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<a href="/tags/aep">AEP</a><span class="pur_comma">, </span><a href="/tags/bankruptcy">bankruptcy</a><span class="pur_comma">, </span><a href="/tags/bnp-paribas">BNP Paribas</a><span class="pur_comma">, </span><a href="/tags/ccgt">CCGT</a><span class="pur_comma">, </span><a href="/tags/commission">Commission</a><span class="pur_comma">, </span><a href="/tags/constellat">Constellat</a><span class="pur_comma">, </span><a href="/tags/constellation">Constellation</a><span class="pur_comma">, </span><a href="/tags/constellation-power">Constellation Power</a><span class="pur_comma">, </span><a href="/tags/dominion">Dominion</a><span class="pur_comma">, </span><a href="/tags/electric-reliability-council-texas">Electric Reliability Council of Texas</a><span class="pur_comma">, </span><a href="/tags/entergy">Entergy</a><span class="pur_comma">, </span><a href="/tags/exelon">Exelon</a><span class="pur_comma">, </span><a href="/tags/ferc">FERC</a><span class="pur_comma">, </span><a href="/tags/ge">GE</a><span class="pur_comma">, </span><a href="/tags/goldman-sachs">Goldman Sachs</a><span class="pur_comma">, </span><a href="/tags/lse">LSE</a><span class="pur_comma">, </span><a href="/tags/nee">NEE</a><span class="pur_comma">, </span><a href="/tags/new-england-electric-system">New England Electric System</a><span class="pur_comma">, </span><a href="/tags/nrg">NRG</a><span class="pur_comma">, </span><a href="/tags/public-utility-regulatory-policies-act">Public Utility Regulatory Policies Act</a><span class="pur_comma">, </span><a href="/tags/purpa">PURPA</a><span class="pur_comma">, </span><a href="/tags/reliability">Reliability</a><span class="pur_comma">, </span><a href="/tags/reserve-margin">Reserve margin</a><span class="pur_comma">, </span><a href="/tags/reserve-margins">Reserve margins</a><span class="pur_comma">, </span><a href="/tags/sempra">Sempra</a><span class="pur_comma">, </span><a href="/tags/southwest-power-pool">Southwest Power Pool</a><span class="pur_comma">, </span><a href="/tags/wecc">WECC</a><span class="pur_comma">, </span><a href="/tags/western-electricity-coordinating-council">Western Electricity Coordinating Council</a> </div>
</div>
Sun, 01 Feb 2004 05:00:00 +0000puradmin10983 at https://www.fortnightly.comThe CEO Power Forum: The Best of the Besthttps://www.fortnightly.com/fortnightly/2003/05-0/ceo-power-forum-best-best
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Five electric utility chiefs are showing true leadership for their companies and for an entire industry.</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Interviews by Richard Stavros</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - May 15 2003</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><blockquote><p></p>
<h3>Five electric utility chiefs are showing true leadership for their companies and for an entire industry.</h3>
<p>Who are the best-of-the-best chief executive officers (CEOs) in the power industry? Fortnightly magazine wanted to know. After an almost unending parade of accounting scandals, credit downgrades, and overall corporate malfeasance that shook the industry to its foundation, true leadership is needed now more than ever. But just what is true leadership, and how do you measure it? Peter F. Drucker, a famed guru and authority on corporate management, has said that effective leadership is not about making speeches or being liked; leadership is defined by results, not attributes. Certainly, the CEOs profiled in Fortnightly's 2003 CEO Power Forum are leading companies with financial results that should be the envy and example to all of the utility industry.</p>
<p>We asked SNL Financial, the independent energy information and research firm, to analyze the sector and generate a list of profitability metrics for the 10 largest firms by equity market value (see below), which became the basis for our selection of this year's best-of-the-best CEOs. Then, the Fortnightly editors selected from the top companies those CEOs who, to paraphrase another Drucker maxim, did the right things in addition to showing stellar financial results:</p>
<ul>
<li>H. Allen Franklin, Southern Co., for his ability to show how a modern regulated utility is run successfully.</li>
<li>John W. Rowe, Exelon, for his ability to show that utilities can succeed in competitive markets.</li>
<li>Thos. E. Capps, Dominion, for his high ethics and uncanny exercise of good corporate judgment in avoiding the pitfalls of others.</li>
<li>E. Linn Draper Jr., American Electric Power (AEP), for his leadership in restoring the reputation of a great utility name.</li>
<li>Eugene R. McGrath, Consolidated Edison Inc., for showing what T&amp;D utilities can accomplish, and showing true heroism on Sept. 11.</li>
</ul>
<p>It is interesting to note how varied the companies' corporate strategies are-yet all have managed to make the list. Southern Co. (ticker: SO), which is in the number one spot this year, is a 100-percent regulated utility, while Exelon (ticker: EXC), in the number three spot, resides in two competitive markets, Illinois and Pennsylvania. Dominion (ticker: D), in the fourth spot, differentiates itself through its profitable exploration and production business, in addition to being an electric utility. Furthermore, Dominion managed to avoid merchant generation overbuilding and the energy trading scandal, and the company was one of the few that pursued an international strategy and turned a profit.</p>
<p>American Electric Power (ticker: AEP), having done some fine-tuning in response to its previous involvement in energy trading and the merchant sector, is managing to steer to calmer waters, making the ninth spot on the list. Last but not least is Consolidated Edison (ticker: ED), which as one of the largest wires businesses in the country, shows you don't need generation to be among the elite.</p>
<p>So, what is the future of the electric utility industry, and where is it going? In the following pages, five of the industry's top leaders talk about the strategy and future of their companies and the industry. From all of us at the Fortnightly, we hope you enjoy this year's CEO forum.</p>
<hr />
<h2>Chairman, President, and CEO of Southern Co.</h2>
<h4>"A lot of wholesale customers are most interested in having a reliable, dependable source of power to serve their customers. We are seeing a lot of those folks turn to us."</h4>
<table align="center" border="0" cellpadding="0" cellspacing="0">
<tbody>
<tr>
<td valign="top" width="30%">
<p><b>The Company</b></p>
<p><b>Market Cap End of 1Q 2003:</b><br /> $20.5 billion</p>
<p><b>P/E Ratio End of 1Q2003:</b><br /> 15.5 times earnings</p>
<p><b>Revenue 2002:</b><br /> $10.55 billion</p>
<p><b>Net Income 2002:</b><br /> $1.32 billion or $1.86 per share</p>
<p><b>Employees:</b><br /> 26,000</p>
</td>
<td valign="top" width="70%">
<p><b>The Executive</b></p>
</p>
<p><b>Age:</b> 58</p>
<p><b>Education:</b> Franklin received a bachelor's degree in electrical engineering from the University of Alabama.</p>
<p><b>Board Memberships:</b> Franklin is a member of the board of directors of Southern Co. He is a director of SouthTrust Corp. He was elected a senior member of the Institute of Electrical and Electronics Engineers. Franklin serves on the United Way of Metropolitan Atlanta's board of directors. He is a member of the board of directors of the Georgia Chamber of Commerce and the Metro Atlanta Chamber of Commerce. He was appointed by former Georgia Gov. Roy Barnes to the Board of the Georgia Department of Industry, Trade, and Tourism. He served as president of the Atlanta Area Council of the Boy Scouts of America and as chairman of the Centennial Olympic Park Area Inc. He also served on the advisory board for the Atlanta area Salvation Army, the board of directors of Central Atlanta Progress, National Board of the National Wild Turkey Federation, and the board of trustees of the Robert Woodruff Arts Center and Georgia Research Alliance.</p>
<p><b>Earlier in Career:</b> Prior to his current position, he was president and chief operating officer of Southern Co. From 1994 to 1999, he was president and chief executive officer of Georgia Power Co., Southern Co.'s largest subsidiary. Prior to his position with Georgia Power, he was president and chief executive officer of Southern Company Services Inc.</p>
</td>
</tr>
</tbody>
</table>
<h4>How do you intend to maintain growth at Southern?</h4>
<p>We have exceeded our growth targets for the last couple of years since we spun [off] Mirant. We have been saying that we intended to grow earnings at least 5 percent per year on an earnings-per-share basis. We have been substantially higher than that. We are still planning to produce at least 5 percent earnings growth. One of the significant advantages we have is we are in a region of the country that has had robust population and economic growth in the Southeast, and specifically in the Atlanta area. Even though this part of the country is in a downturn like everywhere else, all of the demographics and all of the data say that the growth is going to come back here. So, even our base business, which is the regulated electric business, is going to have relatively high growth numbers compared to other parts of the country. We are in a competitive generation business that is growing quite rapidly even during the economic downturn, and even with the problems in the IPP business in other quarters, we are still seeing our competitive generation business growing in the 15 to 20 percent growth rate category. That is for several reasons. We participate in the competitive generation business but in a very different way than most of our peers. We only build power plants after we have customers. We only build power plants after we have long-term contracts for the output of those plants. Because of the stability and reliability associated with Southern Co.'s name, there are a lot of wholesale customers (co-ops, municipals, and other utilities) that are most interested in having a reliable, dependable source of power to serve their customers. We are seeing a lot of those folks turn to us.</p>
<h4>How long are these contracts for?</h4>
<p>Anywhere from five years to 15 years, with seven to 10 years being a more typical number. We like that because it gives us certainty in earnings and gives us confidence to build additional plants when you have that kind of earnings stability over a period of time. But the customers like it also because these wholesale customers that we are selling to have retail customers that they are obligated to serve.</p>
<h4>How do you manage the commodity risk in your competitive generation business?</h4>
<p>In any business that produces a decent return, there are business risks, or we couldn't produce the kinds of returns we are talking about. What we have attempted to do is structure our competitive generation business to have no more risk than a regulated business, and that is hard to do because a regulated business is, comparatively speaking, a low-risk business. The way we have done that is to deal with each of these risk factors separately. Regarding market prices of power, the day-to-day and hour-to-hour changes in market prices for power-we mitigate that by simply having contracts with creditworthy entities that pay us our fixed cost and a return on our plants. So we are not affected. The profitability of these contracts is quite insensitive to short-term market prices for power. Two, a major risk is fuel volatility, especially natural gas price volatility. We do not take fuel price risk in any part of our business. In our competitive generation business that gas price is passed on in an energy charge to whomever is purchasing the power. They take the fuel risk and we are happy to help hedge that risk if they ask us to, but we don't take fuel price risk and we don't take electric power price volatility risk. In addition, if you have a long-term contract there is always the credit quality of the counterparty to be concerned about. In the vast majority of the contracts that we have, the vast majority of the revenues from those contracts are with counterparts that are investor-owned utilities or they are co-ops and municipals that have retail customers that are going to purchase that power. So, the great bulk of our contracts are not third parties playing in the market. It is utilities that have an obligation to serve that will sell that power and will collect that revenue that are very likely to maintain their credit quality.</p>
<h4>In what other ways is your competitive generation business different from other companies in the independent power sector?</h4>
<p>Many companies in the IPP sector build plants with the expectation that they can sell the power in the short-term market. We don't do that. Many of the players in the past have taken natural gas price risk and have guaranteed fixed priced contracts. We don't do that. We are not capable of adequately mitigating or hedging that risk. It is not a risk that we would take in the past and not a risk we would take in the future.</p>
<h4>What are the macro-effects of an illiquid wholesale market to the industry?</h4>
<p>It doesn't have much of an effect on us, to be perfectly honest, or our retail customers or other retail customers in this part of the country. That is one of the reasons that you can see such different views out of utilities and out of state regulators and governors regarding some of the wholesale market development and wholesale market proposals.</p>
<h4>Say, for instance, a power plant that you have allocated to serve a particular customer goes down, and supplies are short. How would you be able to satisfy your obligation?</h4>
<p>First of all, you plan for those events, and you have enough reserves to cover for those cases. But in addition, for decades we had the opportunity if one company gets into trouble-if it doesn't have enough capacity because of high load or outages-you simply purchase from parties around you, whether it's other utilities or other IPPs. That's nothing new. That was taking place before we had ever heard of an IPP and before we had ever heard of some of the current wholesale market concepts. You can do that with the wholesale market the way it was 30 years ago. You can do it with the wholesale market 20 years ago or 10 years ago.</p>
<h4>What is your view on the wholesale market?</h4>
<p>Let me clarify. The better the wholesale market works, the more efficient it is and the better for everybody. We fully support efficient wholesale markets, and we fully support transparency in wholesale markets. The point I am making is that as far as consumers are concerned, there is a different order of magnitude of dependence on wholesale markets depending on whether there is retail competition or not. In areas like the Southeast, where utilities still build enough generation to serve their customers, the great majority of cost associated with serving those customers is related to the cost of the plants those utilities build. Companies will feel optimized by buying and selling on the margin at the top of the stack into the wholesale market. The better the wholesale market works the better it is for retail markets, even here in the Southeast. It's just the relative impact is much smaller here than in an area where retail customers depend exclusively on the wholesale market.</p>
<h4>Last year in your letter to shareholders you discussed your involvement in the Southeastern RTO. What is your current position on the issue, and how does it relate to your opposition to SMD?</h4>
<p>We have made a lot of progress on SeTrans. I really believe it is a model effort to voluntarily put an RTO together that covers a very large region. Scope-wise it would be one of the largest RTOs in the entire country. Participation-wise it is the most diverse in the country. To my knowledge it is the only RTO that includes the co-ops and municipals in it as full participants.</p>
<p>The problem with standard market design is that it is inconsistent with the rules we were operating under to form SeTrans. We had FERC Order 2000, which said RTOs are voluntary and here are the requirements to form an RTO. We set about to voluntarily form an RTO that met all of those standards, and SeTrans does. In the middle of that process, after we had assembled all these players and we had a number of the states showing interest in SeTrans, FERC issues a standard market design proposal where RTOs really are not voluntary and where the rules are changed dramatically. We have a dilemma that we have an RTO that we have spent years working on and have a great deal of investment as far as players being committed to. Then, all of a sudden, we have a proposed rule out of FERC that is inconsistent with that RTO. It's like changing the rules in the middle of a ball game. The result of that has been that we have continued to work on SeTrans under the original rules. FERC has indicated that they see a lot of good elements in SeTrans. My judgment is that they favor us proceeding with SeTrans.</p>
<h4>Is there one thing that you would change with SMD?</h4>
<p>There are a lot of things. The way transmission is priced. The movement of jurisdiction from the states to FERC. The loss of native load priority and the ability to assure reliability for native load. It is a whole series of important issues where the SMD is dramatically different than Order 2000. That change of direction has clearly put some real question marks in our ability to ultimately implement SeTrans. It has also created major concerns among state policymakers, especially state public service commissioners. FERC has indicated they will reconcile SMD with some of the concerns they have heard from the states. Hopefully, this will remove some of the confusion and help get us back on track.</p>
<h4>Is bigger better? What has been the benefit to Southern of its size?</h4>
<p>First of all, I would say that bigger is not necessarily better in my judgment. I think that there is a critical size that companies such as ours achieve where you continue to accrue benefits. I think it is helpful if a company is large enough to be able to finance significant projects by itself without bringing in others. I think it's helpful if a company has enough generation to really see the efficiencies of a large fleet of generation. I think it is helpful if a company has an expansive balance sheet that can compete with the balance sheets of competitors.</p>
<p>At the same time, when a company is as large as Southern or as large as any of the top 10 utilities in this country, getting bigger from that is a great benefit. I think it is important to get better. One of the reasons we have not been acquisition-happy is that we have been extremely disciplined on why we would do that. Does it really have earnings per share growth? Is there something important that we can do if we were bigger that we can't do now? The answer is generally no. On paper it always appears better to be bigger. But bigger is always more bureaucratic and bigger is decisions further from customers, and bigger companies tend to be slower. For our judgment, there is no great benefit to be substantially larger. If you are going to get bigger, it should be for reasons other than being larger.</p>
<hr />
<h2>Chairman, President, and CEO of Exelon</h2>
<h4>"We do believe our industry will have opportunities. Our preference would be an integrated generation, transmission, and distribution company in an area that has made the transition to competition."</h4>
<table align="center" border="0" cellpadding="0" cellspacing="0">
<tbody>
<tr>
<td valign="top" width="30%">
<p><b>The Company</b></p>
<p><b>Market Cap End of 1Q 2003:</b><br /> $16.4 billion</p>
<p><b>P/E Ratio End of 1Q2003:</b><br /> 10.3 (forward '03)</p>
<p><b>Revenue 2002:</b><br /> $15 billion</p>
<p><b>Net Income 2002:</b><br /> $1.4 billion</p>
<p><b>Employees:</b><br /> 25,000</p>
</td>
<td valign="top" width="70%">
<p><b>The Executive</b></p>
<p><b>Age: 58</b> </p>
<p><b>Education:</b> University of Wisconsin, followed by the University of Wisconsin Law School.</p>
<p><b>Board Memberships: UnumProvident Corp. and Fleet Boston Financial. Additionally, he is on the Board of Trustees at The Art Institute of Chicago, The Chicago Council on Foreign Relations, The Chicago Historical Society, The Field Museum, the Wisconsin Alumni Research Foundation, the American Enterprise Institute, and the Illinois chapter of The Nature Conservancy.<br /> Mr. Rowe is past chairman of the Edison Electric Institute, a trustee of Northwestern University and a member of The Economic Club of Chicago, The Chicago Urban League, and The Commercial Club of Chicago, where he serves on the Civic Committee.</b></p>
<p><b>Earlier in Career: Prior to the formation of Exelon, Mr. Rowe served as chairman, president, and chief executive officer of Unicom Corp. and Commonwealth Edison. Mr. Rowe was president and chief executive officer of New England Electric System from 1989 to February 1998, and he served as president and chief executive officer of Central Maine Power Co. from 1984 to 1989.</b></p>
</td>
</tr>
</tbody>
</table>
<h4>What has contributed to your company's ability to weather the economic downturn?</h4>
<p>What has allowed us to weather the storm is that we have focused intensely on improving our operations and cutting costs at the same time. That is most highly represented by our nuclear operation, where we have gone from a 47 percent capacity factor six years ago to averaging 93 percent the last three years, and done it spending less money on many things simply by doing the job right. It is also represented by the money that we have taken out of areas like IT and overall administration since we did the merger between ComEd and PECO.</p>
<h4>Are you one company now?</h4>
<p>I would not say that everything is done. I would say that two-thirds of the job is done. I think there is more saving to be done out of consolidating our supply chain. I think there are more savings to be made from operating the delivery businesses in PECO and ComEd more jointly. I think there are more savings to be made in IT. As I look over things, I think we have very well consolidated nuclear. I think we are very far in consolidating our fossil operations. We have made big progress in these areas, but we are not done yet.</p>
<h4>What is the strategy going forward in terms of growth, and what assets would you think of purchasing to support that growth?</h4>
<p>Our strategy is first to learn from both past successes and past failures and try to get the numbers right. We are absolutely committed that we will not grow unless we can do it in an accretive way. We, like other utilities, do not have room for big mistakes that produce losses. Frankly, in our business there is no strategy powerful enough to justify two to three years' dilution. Anything we do, we have to have high confidence that it will be accretive. That said, we do believe our industry will have opportunities. Our preference would be an integrated generation, transmission and distribution company in an area that has made the transition to competition. But like everybody else, we are keenly aware that there are some very depressed generation companies around, and if we thought the prices were low enough so the acquisition could be properly accretive, we would consider that too.</p>
<h4>What kind of M&amp;A would you be interested in?</h4>
<p>The first criterion is accretion and second criterion is good return on investment, and beyond that, integrated utilities fit our strategy best. The reason we haven't done one is we haven't found somebody that fits our criteria who wants to do a deal with us.</p>
<h4>Would you think of selling your transmission assets? Does that make sense to you?</h4>
<p>We are ardently in favor of the creation of a super-RTO in the Northeast. We want to belong to PJM because it unites the two halves of our company and gives us maximum flexibility. So, we would love to see PJM and MISO integrated as much as possible. We would certainly consider selling our transmission assets if: a) that helped the Northeast market develop; b) it solved problems for FERC, and; c) the Senate passes the House bill that protects us from adverse tax consequences. So, there are three very important things going on, but I'm not sure that will come to pass.</p>
<h4>When do you believe power markets will rebound?</h4>
<p>In terms of power markets, we tend to see them recovered just a little already. We don't think you'll see substantial recoveries until the 2006-2007 time period, but we don't think it is as late as 2010. We believe that the economy will begin to improve if not this year, next year or 2005. We believe the current excess capacity will be soaked up partly by improvements in the economy and partly by continued environmental pressure to shut down some of the least efficient of the old units.</p>
<h4>Do you believe the growth strategies of yesteryear, such as international and independent generation, will again be available to utilities and supported by investors?</h4>
<p>Personally, I believe the right strategy for our company is to focus on the United States, to focus on generation, transmission, distribution and focus on trying to serve customers and make money by integrating those operations more successfully and across broader regions. I think the most important single lesson from California is that total disaggregation is a bad idea for customers and a bad idea for investors. But that doesn't mean that you will not see a resurgence of international expansion. There is nothing inherently wrong with it.</p>
<p>I think you will see a resurgence of the independent generation business, but it will not be as cushy as it was when they got long-term contracts from utilities, nor will it be as aggressively self-confident as it was three years ago when P/Es were astronomical. I think you will see continued evolution in retail competition but slower than we used to think. I think you see a very high recognition today that utilities still have the obligation to keep the lights on and you have to keep some muscle for them to do it.</p>
<h4>What will the Exelon of 2050 look like?</h4>
<p>It will be very different and it will change beyond my comprehension several times before we get to 2050. My wild speculation is that it would be a company that would be the nation's leader in the next generation of nuclear technology and in biomass and distributed generation, because I concur with the EPRI vision of a system of the future that mixes local generation, peaking, biomass, and baseload power in a very complex interactive system. Maybe by that time it will be farther than the hydrogen economy that the president foresees. My strength as an executive has been that I have never thought my crystal ball was really made of crystal. So, if I can see two to five years ahead, I'm doing pretty well. Seeing 50 years ahead is something I disclaim.</p>
<h4>You announced a cost reduction plan aimed at target savings of 5 percent to 10 percent from current capex and non-fuel O&amp;M budgets ($6B combined). How will you reach these savings? How dependent are forward earnings forecasts on your ability to meet these targets?</h4>
<p>We have launched The Exelon Way initiative as a long-term, all-encompassing effort to transform how Exelon defines and conducts business. Areas currently under evaluation include restructuring of our business units, realignment and integration of support functions, standardization and simplification of processes, and optimization of investment. Our target is $300 [million] to $600 million in increased cash flow from operations by the end of 2004. Current earnings guidance for Exelon is $4.80 to $5.00 per share in '03 with growth thereafter at about 5 percent per year. The Exelon Way initiative would be largely additive to these expectations.</p>
<h4>What about Exelon's efforts to site and build another nuclear plant?</h4>
<p>We intend to apply for an early site permit that would "bank" a site at the Clinton Power Station in central Illinois for future construction of a new nuclear unit, should we ever decide to build one.</p>
<h4>What was wrong with the pebble bed nuclear design project that you pulled out of?</h4>
<p>Nothing wrong with the idea, but the technology is still under development and we are not an R&amp;D firm. If the technology is fully developed and proven, we would certainly consider using it.</p>
<h4>Can building new nuclear be made economic in this environment?</h4>
<p>With current technology, with current market conditions, no. But as with all things, both the technology and the market will change. We'll have to wait and see.</p>
<h4>Some have said that it is patently unfair and uncompetitive for some utilities to be able to compete and take market share from other utilities in competitive states while their vertically integrated utility is being protected from competition by their state PUC. As a utility in a competitive state, what is your stance on the issue?</h4>
<p>Regional wholesale competition provides numerous economic and reliability-related benefits to consumers. It is unfortunate that some states and some utilities view an open, competitive wholesale market as a threat. This is evidenced through recent actions by the Commonwealth of Virginia with respect to the expansion of RTOs and recent legislative proposals that call for a "clarification" of jurisdiction that would severely restrict FERC's authority over interstate commerce and overturn 75 years of Supreme Court precedent. Exelon remains committed to public policies that build competitive wholesale and retail markets to meet the needs of our customers.</p>
<p>We have learned a number of key lessons over the past few years: Retail competition works well for large customers; small customers need a reliable regulated service option in addition to a competitive choice; and utilities that provide the regulated service option must be allowed to make their own supply arrangements.</p>
<h4>What do you believe is the future of retail? Has it been a success or failure?</h4>
<p>In Illinois, open access has been available to all non-residential customers since Dec. 31, 2000. As expected, the largest customers have been among the first to enter the market. Indeed, the large customers participating in open access in ComEd's service territory today represent roughly 30 percent of all ComEd kilowatt-hour sales. Furthermore, market development at the large customer level has been so robust that the Illinois Commerce Commission allowed ComEd to declare the 3 MW and greater customer market "competitive" and abandon tariffed service offerings to these customers.</p>
<p>Competition has been a success in Illinois, at least in ComEd's service area, to date in the large C&amp;I [commercial and industrial] market. As for smaller customers, the jury is still out. Time and market development will tell.</p>
<p>In Pennsylvania, the number of active suppliers operating in PECO's territory fell from 36 in January 2001 to an average of 16 in 2002 and 2003 to date. Choice rules are such that it is relatively easy for suppliers to get into and out of the market. The only constant is that the utility has to offer fixed prices until 2010 in PECO's case. In Pennsylvania, we at PECO are only halfway through a transition period that ends 2010. The post transition market structure is anyone's guess, but it is almost certain to be different than the rules in the transition period.</p>
<p>Defining success is a matter of perspective. In Pennsylvania, provider of last resort rates were set in 1998 for the future 12 years. This has recently turned out to be fantastic for customers because they have been protected from the volatility of the wholesale electricity market. I would say that consumer advocates call this extremely successful: Customers have choices and price protections. However, what is good for the customer is not always good for alternative suppliers. Suppliers at the time probably would say that it has not been successful. If you were to ask them the question in 2001, you would probably have received a different answer. If you ask them in 2004, maybe a different answer yet. Wholesale market prices are like the weather in some places-if you don't like it at the moment, stick around, it's sure to change.</p>
<h4>How do you feel about the random assignment of customers?</h4>
<p>What we have learned since 1999 in PECO Energy is that if there is to be a random assignment of customers, it is important to develop procedures in cooperation with consumer advocates and regulators so that any process results in the consumer being better off by being randomly selected and assigned. This can mean being guaranteed savings on their generation bill or being sold a generation product with a renewable power component (such as wind or solar) at the same price they were paying for a non-renewable component product.</p>
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<h2>Chairman, President, and CEO of Dominion</h2>
<h4>"We have two big finds in the Gulf [of Mexico], Front Runner and Devils Tower. Once they're both running that's going to add 120 billion cubic feet of gas for us. That will throw off a lot of cash."</h4>
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<p><b>The Company</b></p>
<p><b>Market Cap End of 1Q 2003:</b><br /> $17.1 billion</p>
<p><b>P/E Ratio End of 1Q2003:</b><br /> 11.8 (forward '03); 11.5 (trailing '02)</p>
<p><b>Revenue 2002:</b><br /> $10.2 billion</p>
<p><b>Net Income 2002:</b><br /> $1.362 billion</p>
<p><b>Employees:</b><br /> 17,000</p>
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<p><b>The Executive</b></p>
<p><b>Age:</b> 67</p>
<p><b>Education:</b> Undergraduate and Law degrees from the University of North Carolina.</p>
<p><b>Board Memberships:</b> Formerly director of Bassett Furniture Industries Inc. Currently a member of the board of visitors for William &amp; Mary, and the board of trustees of the Virginia Foundation for Independent Colleges.</p>
<p><b>Earlier in Career:</b> Joined Carolina Power &amp; Light Co. in 1970 as senior counsel, then became vice president and general counsel of Boston Edison Co. in 1974. Partner at Miami law firm of Steel Hector and Davis, where he also served as chairman of the exectuvie committee for the firm. Joined Virginia Power as executive vice president in 1984 and became president of Dominion in 1986. He was elected chief operating officer of the company in 1989 and CEO in 1992.</p>
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<h4>Equities analysts say that your company's financial profile is strong and keeps getting stronger, but they say potential risks to upward valuations are that roughly 23 percent of earnings per share comes from the natural gas commodity sensitive exploration and production (E&amp;P) business. How would you address these concerns?</h4>
<p>We don't want to become an E&amp;P company, but right now we love our E&amp;P. We have 6.1 trillion cubic feet of reserves, and gas prices are high. We think gas probably will trade the next four to five years between $3.50 and $4.50. We make good money on that.</p>
<h4>Why do you think analysts are concerned with the E&amp;P business?</h4>
<p>I think a lot of the utility analysts do not understand E&amp;P. We are different from the typical E&amp;P company. We hedge and we put together a budget for the next year and a three-year plan, and when we see the gas prices on the forward curve going out higher than we have in our budget and three-year plan, we go out and hedge all we can. A lot of E&amp;P companies do not do that. They go and try to hit home runs when gas prices are high and then swing out when gas prices are low. We try not to do that. We try not to have the big swings in our earnings that a typical E&amp;P company would have.</p>
<h4>What is it about Dominion's culture that makes it more conservative than other E&amp;P businesses in risk managing the commodity price swings more tightly?</h4>
<p>When E&amp;P is between 22 percent and 23 percent of your earnings … what you want to do is grow earnings 5 to 7 percent each year. If you grow earnings 15 percent this year because gas prices are so high, what do you do next year when they are not so high? That is why we hedge as much as we can. We are partially hedged for 2004 and into 2005.</p>
<h4>What are the prospects of siting new nuclear power?</h4>
<p>Right now I don't think anyone in this country is going to build another nuclear plant. We certainly are not. There is too much risk. We took a look at it. GE came down and talked to us. We figured that a new nuclear power plant would cost $6 [billion] to $7 billion and take 6 to 7 years, and the bus-bar cost, if everything went right, would be something like $28 per megawatt-hour, and we thought that was too high. It is too much risk. It is like bidding part of your company on one plant. Nobody is going to do that. It is not economical.</p>
<h4>Where would nuclear have to be for it to be economical?</h4>
<p>It would have to be below $24 per megawatt hour to be economical.</p>
<h4>I live in Virginia. I have yet to be contacted by an alternative provider wanting to sell me power. Why is that, and what does that mean for electric competition in Virginia?</h4>
<p>Do you know why? It is because we are giving it away. Our rates are low. We have lowered our rates three times since 1992, and they are capped until July 2007. I don't know why people haven't come in. I guess we have a low rate and it is hard to compete with.</p>
<h4>Do you think regulators have failed at designing the competitive market in Virginia?</h4>
<p>It just takes time to do this. I think there will be more competition coming. The ones that were going to come in, the Enrons of the world, aren't around anymore. They were really aggressive until they went belly up.</p>
<h4>Knowing you were one of the few U.S. utilities that profited from an international strategy, making $201 million from the sale of Midlands in the U.K., what international markets would you pursue?</h4>
<p>Would I go anywhere offshore other than gas in Canada? No. The risk-adjusted return is just not there. We pulled out of Latin America; we were down there in Belize, Bolivia, Peru, and Argentina. The climate was getting bad and we had a chance to sell. We came out a little ahead, but not nearly as well as we did in the U.K. We did that before this country started deregulation. Once deregulation started coming to the Northeast, it was just a much better risk-adjusted return over here. We got out of Latin America.</p>
<h4>What specifically soured you on your Latin American investments? How did the risks in your risk-adjusted return framework change?</h4>
<p>I'll give you an example of a company in Brazil. We took a good look at Brazil and there was a hydroelectric plant, a pretty good size one that was over 1,000 megawatts. The problem down there was that if you bought that plant you had to finance it in U.S. dollars because their market was not big enough or sophisticated enough to raise a lot of money in their local currency. So, you had to raise dollars and then get paid in the Real. You have seen what has happened to the Real now. That's a no-no. You don't want to invest in one currency and get paid in another unless you are willing to take a hell of a big currency risk, and we were not willing to do it.</p>
<h4>What conditions would you need to begin thinking about an international strategy again?</h4>
<p>A frontal lobotomy.</p>
<h4>Many utilities have said that they may be interested in acquiring distressed assets. Is Dominion? Why?</h4>
<p>Yes. We are acquisitive if it is accretive. We don't buy things for strategic reasons and hope that we will make money on them down the road. We don't believe in buying market share if you are not going to make a profit on it.</p>
<h4>Is being a big utility better? Will Dominion get bigger by whole acquisition of companies rather than assets?</h4>
<p>We think you are probably better off buying assets such as baseload generating units or pipe. Big is OK. Big is good. But the bigger you are the harder it is to get the five to seven percent growth. But you can do things and take some risks that a smaller company can't do, and you can afford to buy some things that a small company can't do. Being big has some advantages. But it is harder to turn a battleship than it is a PT boat. So, the idea is not to be big for big's sake, the idea is to be profitable. If you can be big and profitable, so much the better, but if it comes down to one or the other, you'd much rather be profitable.</p>
<h4>How do you plan to grow in the next few years?</h4>
<p>We will produce this year about 470 billion cubic feet equivalent of natural gas. We have two big finds in the Gulf [of Mexico], Front Runner and Devils Tower. One comes on in the beginning of next year and the other one in the second half of next year. Once they're both running that's going to add 120 billion cubic feet of gas for us. That will throw off a lot of cash for us. We will take that cash and buy some generating units, or buy some pipe, or buy some onshore long-life reserves. We will grow it that way. We also have power plants under construction that come on line in 2005 for the co-ops in North Carolina and a big one outside Philadelphia coming on line in 2004, which we have people wanting to buy from.</p>
<hr />
<h2>Chairman, President, and CEO of American Electric Power*</h2>
<h4>"It is our view that the environmental constraints are going to continue to get more stringent, and we think in some instances they should."</h4>
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<p><b>The Company</b></p>
<p><b>Market Cap End of 1Q 2003:</b><br /> $9.026 billion</p>
<p><b>P/E Ratio End of 1Q2003:</b><br /> 10.11</p>
<p><b>Revenue 2002:</b><br /> $14.5 billion</p>
<p><b>Net Income 2002:</b><br /> Negative ($519 million), including one-time charges and writeoffs. Ongoing earnings (earnings from operations before one-time or unusual items) was $957 million.</p>
<p><b>Employees:</b><br /> 23,000</p>
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<p><b>The Executive</b></p>
<p><b>Age:</b> 61</p>
<p><b>Education:</b> Bachelor of Arts and a Bachelor of Science in chemical engineering from Rice University in Houston, and a doctorate in nuclear science and engineering from Cornell University in Ithaca, N.Y. He is a registered professional engineer in the state of Texas.</p>
<p><b>Board Memberships:</b> Elected a member of the National Academy of Engineering. Elected to the Cornell University Council Board in 1998, appointed to the University of Chicago board of governors for Argonne National Laboratory in 1999, and serves on the University of Texas Engineering Foundation Council. Appointed to the board of directors for The Nature Conservancy in September 1999. He serves on the board of The Nature Conservancy's Ohio chapter. He is also a director of the Nuclear Energy Institute (past chairman), the Institute of Nuclear Power Operations (past chairman), the National Coal Council (past chairman), and the Edison Electric Institute (past chairman).</p>
<p><b>Earlier in Career:</b> He became president of AEP and the Service Corp. in March 1992, following 13 years with Gulf States Utilities Co. in Beaumont, Texas, where he served as chairman, president and chief executive officer. He became chairman, president, and chief executive officer of AEP in May 1993.</p>
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<h4>What possibilities are there to continue investigations into trading?</h4>
<p>I really don't have much to say on that one. The ball is in the court of the various entities that might investigate. They have asked us questions. We have responded to all of the questions. I have no reason to believe that there is anything more, but I also have no way to tell that for sure.</p>
<h4>Are there any other risks of liquidity crisis at AEP?</h4>
<p>We have done a lot in the way of financing already this year. About two and a half weeks ago, we sold $2 billion worth of bonds for our Ohio and Texas companies. That was followed just a few days later by $1.1 billion worth of equity issuance, and then last week we sold another $500 million worth of bonds for the parent. In addition, we had a bank line that was to have matured in May of this year. We have replaced it with two pieces of a bank line of credit, one of which is a one-year line of credit and the other one is a three-year line of credit. So, we now have lines of credit that amount to $750 million that expire in one year, $1.5 billion that expire in two years, and another $750 million that expires in three years. So, we have lots of credit and about $1.7 billion in cash, and have not had difficulty selling bonds or stock.</p>
<h4>What is your debt ratio? Where do you want to be?</h4>
<p>We have said that we want to be between 50 and 55 percent. We are at about 54 percent.</p>
<h4>What is the company's view on the environment, and what is the company actively doing to reduce emissions?</h4>
<p>We are a large emitter of various gases because we are a huge generator of electricity. It is our view that the environmental constraints are going to continue to get more stringent, and we think in some instances they should. We have been big supporters of the president's Clear Skies proposal that would materially reduce the allowed emissions of nitrogen oxide, sulfur oxides and mercury. We have quite low-cost generation. We are generating a kilowatt-hour at a production cost of $14 or $15 per megawatt-hour. Compare that with a modern combined-cycle gas plant and $6 gas; the price of that is well over $35 per megawatt hour. So, we think our coal will continue to be in the money even with additional environmental emission reduction expenditures. The one wildcard issue is CO2. We think that is an issue that we should be addressing. We have been at the forefront of the groups that advocate voluntary programs to either avoid, reduce, or sequester CO2. We have huge projects in South America that sequester CO2 and we've done various things in the United States as well. We think that those things should be done. We are opposed to mandatory reductions because the technology does not yet exist. But we think we ought to have a real focus on the development of technology that would in fact reduce CO2 material in the meantime. We think voluntary programs make a lot of sense.</p>
<h4>In looking at the technologies that exist, have you been spending money on that technology?</h4>
<p>There really are no technologies that can be applied to large-scale facilities that will remove CO2 from the stack. What we have devoted our attention to at this stage is sequestration in terms of forestry and also a project that is a joint-project with the Department of Energy and Battelle to explore injecting CO2 into deep geologic structures.</p>
<h4>Many utilities have pre-empted new environmental legislation and begun installing and implementing new emissions reduction technologies. Is that something you are doing?</h4>
<p>We have already committed to spending about $1.5 billion dollars for NOx reduction. We are in the process of installing selective catalytic reduction on a numer of our facilities. That is really to meet current requirements for NOx removal. As the legislation passes to make even more stringent reductions, we will add that sort of technology to even more plants. We also would be in the position to add sulfur dioxide scrubbers to plants if in fact the Clear Skies initiative passes, which we support.</p>
<h4>What's your view on clean coal?</h4>
<p>I think that clean coal makes huge sense. That presumably involves coal gasification in an integrated combined-cycle plant. The question there is economics. Those plants at the moment cannot compete with other technologies. So, to get them up in running in quantity will require some sort of government initiative, I suspect.</p>
<h4>AEP sold its Texas customers to Centrica. What is the company's position on retail markets?</h4>
<p>We do business in 11 states. In four of the 11 states there is, at least theoretically, customer choice at the residential level. The four states have quite different characteristics. In three of the four, Virginia, Michigan, and Ohio, our rates are low enough that essentially none of our customers have switched to new suppliers. In Texas the situation was quite different. The way that retail competition was introduced was that all customers of every utility were switched to new suppliers. The particular rules in Texas, we felt, made supplying those retail customers a very risky business. The customers could come and go at will. We were obligated to serve anybody who wanted us to serve them at a fixed price with no control over the price of the fuel for our power plants. So, the customers could pick and choose. They could leave us when our prices were high and come back to us when the competitor's prices were higher, and we then had to procure the fuel to serve them. We thought our best opportunities in Texas were in the wholesale business and the energy delivery business, and we would leave what we consider to be a more risky business to someone that thinks of themselves as a skilled retailer, namely Centrica.</p>
<h4>Why aren't RTOs the right idea, if that is your belief?</h4>
<p>We don't necessarily believe that there is anything wrong with an RTO. We are in the troubling situation that we were proceeding to join the PJM RTO and expected to do that around the first of March. We encountered significant resistance from some of the state commissions that don't like the FERC standard market design. There is legislation in Virginia; there is considerable pushback from Louisiana about whether or not we ought to be involved in an RTO. What we have said is that you, the FERC, have to work this out with the states. We are not going to be caught in the middle between our retail rate jurisdiction regulators and the federal level. We are happy with the idea of joining an RTO, but we are sure not going to do it if our state regulators say not to. So, FERC is going to have to assert its authority one way or another. We are simply waiting for that to happen.</p>
<h4>How would you like to be remembered at AEP?</h4>
<p>I would hope that people would say that by the time I leave the company it was a strong company that was noted for providing reliable and affordable service to its customers. That it was an environmentally responsible entity, and that the employees, shareholders and customers found AEP an attractive place to either to work, take electric service, and invest in.</p>
<hr />
<h2>Chairman, President, and CEO of Consolidated Edison Inc.</h2>
<h4>"About 5,000 megawatts of new electric capacity needs to be built over the next five to seven years to continue to meet [New York City's] load."</h4>
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<p><b>The Company</b></p>
<p><b>Market Cap End of 1Q 2003:</b><br /> $8.2 billion </p>
<p><b>P/E Ratio End of 1Q2003:</b><br /> 12.2 </p>
<p><b>Operating Revenue 2002:</b><br /> $8.5 billion </p>
<p><b>Net Income 2002:</b><br /> $646 million </p>
<p><b>Employees:</b><br /> 14,293</p>
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<p><b>The Executive</b></p>
<p><b>Age:</b> 61</p>
<p><b>Education:</b> Bachelor's degree in mechanical engineering from Manhattan College; MBA from Iona College.</p>
<p><b>Board Memberships:</b> Amercan Woman's Economic Deveopment Corp., the Atlantic Mutual Insurance Co., Barnard College, the Business Council of New York State, the Fresh Air Fund, the Hudson River Foundation for Science and Environmental Research Inc., Manhattan College, the Partnership for New York City, Schering-Plough Corp., the United Way of New York City, and the Wildlife Conservation Society.</p>
<p><b>Earlier in Career:</b> Joined Con Edison as an engineer in 1963; held key executive positions in the utility's major operation and customer service areas, and managed fossil-fired and nuclar generating plants; was elected vice president in 1978, executive vice president in 1982, and president and chief operating officer in 1989; became chairman and CEO in September 1990.</p>
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<h4>What do think has contributed to your company's ability to weather this economic downturn?</h4>
<p>We never left the basics. We stuck to our core strategy throughout the restructuring of our industry. We took a look at the restructured industry early on and decided where our expertise lay and recognized that we have been a distributor of electricity for many, many years.</p>
<h4>How do you plan to meet demand given the siting challenges in the city?</h4>
<p>Siting challenges have always been an issue in the city because of the dense urban environment, and no one is anxious to have a power plant in their back yard. So, we have had to deal with that issue for many, many years. We do that first by working with the communities, making sure we communicate the need for the facilities. In our case, it is primarily substations because we don't build generation in our service territory. So when we do have to site substations, we work with the communities and we make clear what the need is. We have been fairly successful over the years, although not without delays and problems. We have managed to keep ahead of the curve on infrastructure needs for the city so that we didn't constrain economic growth. About 5,000 megawatts of new electric capacity needs to be built over the next five to seven years to continue to meet the city's load. There are several projects under way that will help meet the future load. It's a struggle for power plant developers, but we are optimistic.</p>
<h4>There have been a number of proposals to get more transmission into the city. What is the status of efforts to improve transmission infrastructure in New York City?</h4>
<p>Basically the peak load in our service territory is around 12,000 megawatts. The import capability into New York City is about 5,000 megawatts. We have some requirements that have been developed over the years. In New York state, we are required to have enough capacity to meet our expected peak load plus an 18 percent reserve margin, and we adhere to that fairly religiously. Then, we have a second requirement that 80 percent of our expected peak for the in-city load must be located within the city. These rules are a result of the two major city-wide blackouts: the Northeast blackout of 1965 and the New York City blackout of 1977. From a reliability point of view, there is concern about relying on transmission from outside the city. You can't afford to lose the city, so we have the rule that 80 percent of our generation must be from an in-city source.</p>
<p>We have one of the most reliable distribution systems in the world, and we need to have a very reliable system because New York is a vertical city. We house people vertically, and we move them underground. If you don't have electricity you don't have water either. Our system is built with a second contingency design. That means we operate our system at all times to compensate for the loss of its two largest components. So, for example, if we had a 1,000 megawatt transmission line feeding into the city and we had 1,000 megawatt power plant in the city meeting the load at any given time, we operate so we could lose both of those components at the same time and still not lose the city. So, when a new transmission line is built into the city, we have to go beyond thinking of just putting in that transmission line. We also have to be prepared that in operating that line, if it is lost at some point, that we can handle the loss. We have to build the infrastructure to survive the loss of a transmission line. We have pretty strict reliability standards in the city that have resulted in our having the most reliable system in the world.</p>
<h4>How has the experience of the Sept. 11 terrorist attacks changed your company and the utility business?</h4>
<p>Clearly, everyone is much more focused more on security. We survived and responded to the loss of two of our major substations feeding downtown Manhattan because of a couple of things: the redundancy of our system and the training of our team. In effect, we were able to rebuild all of downtown inside of a week and get the world financial markets back up again. So, emergency preparedness, I think, is foremost on everyone's mind in the electric industry: identifying critical facilities, making sure you secure those critical facilities, and making sure you are working with law enforcement.</p>
<h4>What is your view of retail competition given your retail energy services division?</h4>
<p>We have retail access in our service area and all of our customers have their choice of supplier. Under restructuring in New York, many of the large commercial and industrial customers have chosen to go to energy services companies (ESCOs) for their supply. Our ESCO, Con Edison Solutions, is in that business. Small customers do not have the same motivation as some large customers have to switch suppliers. So, the vast majority of small customers have stayed with us. We go out and secure the supply for them. The switching rate at the residential level is very low. In all, about 153,000 of our 3.1 million customers have chosen an alternate supplier. A large chunk of our load, about 40 percent, goes to large customers. Some of them have gone to ESCOs, but as part of restructuring, we still distribute power for all customers, regardless of who's supplying the electricity.</p>
<h4>What is the average growth rate for your utility?</h4>
<p>Our present projections are for a load growth of about 1.8 percent per year over the next five years. New York is going through some tough times now, but it looks very promising from our point of view. We have a long-lead-time business, and when we look around New York we see many projects under development. For example, on the west side of Manhattan, we have the Javits Center being rebuilt, the extension of the number 7 subway line, the downtown rebuilding, and there's the potential for the Olympics. Last summer, two-thirds of our networks exceeded their forecasts, and we had new peak loads this winter and new increases in energy usage. So, looking forward, New York looks pretty good in terms of the growth potential for us.</p>
<h4>What are the biggest challenges to your company?</h4>
<p>I would say continuing investing in the transmission and distribution infrastructure to make sure the infrastructure stays ahead of its needs so that it doesn't constrain economic growth and constrain jobs and taxes.</p>
<h4>What kind of skill sets should utility executives of the future have?</h4>
<p>A good example is 9/11 because we had very well-trained people to work during an emergency, and under difficult respiratory conditions. We were able to put 2,000 people on the street the next day and start to rebuild lower Manhattan. That took a lot of skill, a lot of commitment and a lot of bravery, frankly, in a lot of cases. Utility people have a service mentality. When we started restructuring in New York 10 or more years ago, a lot of people advised me. They said it was going to be a new world and that I had better make up my mind that half of the people I have wouldn't have the skills to work in this new world. I was told that I would be better off letting them go and going out and hiring people with the right skills. We said no, we don't agree with that. We know who we have. We know their work ethic and we know their loyalty to the company. So, we went and built a learning center. We have a school, a sizeable school. We send hundreds of people a day, even today, through this school. We retrained our people in the new skill sets that would be needed going forward, and it has worked very well through this transition.</p>
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Thu, 15 May 2003 04:00:00 +0000puradmin11215 at https://www.fortnightly.comAdvanced Metering: Policymakers Have the Ballhttps://www.fortnightly.com/fortnightly/2002/09-0/advanced-metering-policymakers-have-ball
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Demand response could help solve some energy problems, but not without state regulators pushing for it.</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Chris King and Dan Delurey</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - September 15 2002</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><blockquote><p></p>
</p>
<p> </p>
<h3>Demand response could help solve some energy problems, but not without state regulators pushing for it.</h3>
<p> <b>FERC Chairman Pat Wood recently testified before Congress</b> that "demand response is a crucial element for efficient grid use, as well as an effective deterrent to the exercise of supplier market power." He noted that "most retail customers see flat, 'after-the-fact' electric prices that give little hint of the underlying cost of energy production; they don't reflect scarcity, as when total demand outstrips supply and purchasers compete for the limited power available, or the higher production costs that occur when more inefficient (and costly) power plants are brought online." He added that demand response, using "smart meters" and real-time and time-of-use rates, would allow consumers to use less electricity when it costs more.</p>
<p>Federal and state regulators, along with legislators, are looking at options to address many energy challenges, and are reaching consensus on the need for demand response-and with it, the need to look at advanced metering policy. Since state regulators are responsible for regulating retail electric service, they have the most important role.</p>
<h3>Why Demand Response?</h3>
<p>Figure 1 is the proverbial picture worth a thousand words. This chart shows the hourly load duration curve for the PJM Power Pool, covering the Mid-Atlantic area. From 1999 to 2001, the highest 15 percent of load on that system-7,500 megawatts-was used only two percent of the time, or only about 100 hours per year.</p>
<p>The Electric Power Research Institute (EPRI) and others have documented that a small shift in usage from the peak period will lead to significant price decreases, as well as a lower probability of electricity shortages.<sup>1</sup> Accordingly, policymakers are recognizing that the present situation, in which consumers get no price signals and pay the same price no matter when they consume power, does not make sense anymore. The answer, they say, is demand response.</p>
<p>Demand response refers to dynamic pricing, whether time-of-use, real-time or critical-peak-day rates, or dynamic load response (including appliance/equipment load control and other interruptible/curtailment programs). While some of these options historically have been referred to as "load management," the change in terminology signifies that advances in metering, communications, and control technology in recent years have resulted in entirely new capabilities. In particular, time-based rates enable consumers to have more choices and more control over their energy use-and of course, their bill.</p>
<h3>Advanced Metering: The Basic Infrastructure for Demand Response</h3>
<p>Automatic meter reading (AMR) technology has allowed utilities in recent years to reduce costs. However, while these cost reductions presumably have been passed on to customers as a benefit, there is no other direct benefit to the customer from an AMR deployment. AMR systems vary in their capabilities, but in general, the aim of such systems has been to replace monthly manual meter reading with automation, and nothing else.</p>
<p>In contrast to typical AMR systems, an advanced meter not only automates the meter reading function, but also does much more. Advanced metering is the key to providing consumers with price signals and the ability to manage their usage in response to such information. Advanced metering technology measures and records usage data, at a minimum, in hourly intervals, and provides usage data to both consumers and energy companies at least daily. <sup>2</sup> With advanced metering, utilities are able to provide customers with price signals and more detailed usage data, which gives customers the ability to manage their usage in response to such information. Advanced metering also provides utilities with many more capabilities to manage their distribution systems and operations more efficiently and reliably, with features such as outage reporting and restoration verification. Advanced metering encompasses all systems that allow electricity consumers to participate in price-based, time-sensitive demand response programs.</p>
<p>The potential benefit from advanced metering and dynamic pricing is significant. McKinsey &amp; Co. estimates that annual savings from dynamic pricing implemented nationwide would be $10 billion to $15 billion, <sup>3</sup> as shown in Figure 2.</p>
<p>These benefits assume that dynamic pricing is implemented voluntarily; customers who cannot or prefer not to shift load off peak would remain on flat rates.</p>
<p>Puget Sound Energy (PSE) in Washington State provides a highly successful example of these policies at work. PSE's customers all have advanced meters and daily access to their time-differentiated usage and price information. To date, over 300,000 of its customers use voluntary time-of-use rates. These customers have reduced their peak load and lowered their overall energy use-and they are pleased with the program. Indeed, 89 percent of participating customers said they were satisfied or very satisfied, and over 90 percent said they would recommend the program to a friend. <sup>4</sup></p>
<h3>Policy Considerations, Federal and State</h3>
<p>In Congress, both the House and the Senate have passed versions of comprehensive energy bills that contain a tax incentive for advanced metering devices, and a new requirement for all federal buildings to have advanced meters. The Senate bill also would allow consumers to ask for, and receive, time-of-use or real-time rates from their utility.</p>
<p>On the federal regulatory side, FERC issued its draft rule on Standard Market Design (SMD) on July 31. Load reduction programs have caught the attention of FERC, and have been included in its proposed SMD. In the notice of proposed rulemaking (NOPR), FERC declared that regional load-serving entities must meet resource adequacy requirements (Generation Adequacy Requirement). The process must entertain all options, including demand response, and not favor one solution over another. The NOPR also noted the need for advanced meters to replace monthly meter reading, where customers see only the "imperfect" price signal of a monthly bill.</p>
<p>On the state front, competitive metering is no longer seen as something that states should pursue. In July, the National Association of Regulatory Utility Commissioners (NARUC) issued a report urging state regulators to re-examine competitive metering based on several factors. Perhaps most importantly, the report highlighted the fact that the costs per meter for ad hoc meter installation are proving to be five or six times the cost of doing a broad, utility-scale deployment. <sup>5</sup> The report also recommended that state commissions explore how to transition consumers into dynamic pricing. Further, NARUC encouraged states to explore state funding or rate-based funding of advanced meters to roll out the technology faster and more cost-effectively, and to enable consumer participation in demand-response programs.</p>
</p>
<dl>
<dt>California already is on the move. In June, the California Public Utilities Commission (CPUC) initiated a rulemaking<sup>6</sup> aimed at developing and implementing a plan to provide customers in the state with the enabling technologies and program options to increase demand response. The CPUC said that:</dt>
<dd>demand-responsive capabilities are important regardless of the ultimate electricity market structure that emerges in the next few years. A perfectly functioning wholesale and/or retail electricity market is not a precondition for development of demand response. On the contrary, demand-responsive capability can be a tool in mitigating the effects of a dysfunctional market, as well as for controlling costs, even in a completely vertically integrated and regulated market.</dd>
</dl>
<p>The commission believes that customers should have access to the greatest feasible range of price information, metering and communications technologies, and energy management equipment to assist them in demand-response efforts. <sup>7</sup></p>
<p>In July, working closely with the CPUC, the California Energy Commission initiated a parallel proceeding that will develop state policies on dynamic pricing and beyond-the-meter demand-response technology standards, such as smart thermostats. <sup>8</sup></p>
<h3>States Should Focus on the Mass Market</h3>
<p>With the notable exceptions of Puget Sound Energy and Gulf Power (which has a highly successful residential real-time pricing program), the primary focus of demand response has been load reduction programs. These programs include demand bidding and interruptible/curtailable programs, and have been operated by Independent System Operators as wholesale programs or as utility offerings to large industrial customers.</p>
<p>As evidenced by discussion of demand response at the July NARUC meetings, it is wholesale-level, large-customer demand response that is still getting the attention. Yet, the demand response that state regulators can have the most control over, and impact on, is the other type-price-responsive demand response on a mass-market basis. Currently, state regulators are giving far less attention to what they can, or should, do to design time-based rates and to ensure that the advanced metering is deployed.</p>
<p>While wholesale level demand response is a natural starting point, it will not provide the most permanent benefits to the nation's electricity system and industry. For example, its usefulness in meeting the generation adequacy requirement is limited. In contrast, mass-market dynamic pricing can have a much greater long-term effect. Providing residential customers with price signals and choices of time-based rates, especially time-of-use and critical peak-day rates, can lead to a cultural, societal-level shift in how customers think about and use electricity. It can lead to utilities and other service providers having new abilities and opportunities to optimize the planning and operation of their generation and delivery systems. Mass-market dynamic pricing also can lead to savings equal to, or greater than, those of commercial demand-response programs. The McKinsey study estimated that the majority-53 percent-of savings would come from the residential sector, even though residents consume only 40 percent of total power.</p>
<h3>The Need for Cost Recovery Certainty</h3>
<p>The gateway to giving customers price signals and providing them with time-based rates is an advanced meter. Thus, state regulators must focus on how to get them deployed. In doing so, they face many barriers and challenges.</p>
<p>A major part of the regulatory bargain for most states that have restructured has been some form of rate cap or freeze. Legislatures saw such caps as a political exchange, a benefit to consumers balanced against the utility side of the ledger that gained the recovery of potentially stranded costs, among other things. What this means, however, is that many utilities are reluctant to make an investment in advanced metering, since they have no ready and available way to recover their costs.</p>
<p>With restructuring still a work in progress, and with competitive metering withering but not officially dead, utilities will continue to be reluctant in their approach to meters unless they can be certain that such costs can be recovered in regulated rates.</p>
<p>Many utilities have moved to AMR based on the business case of cost reductions resulting solely from replacing human meter readers. Advanced metering costs slightly more than AMR, but yields far greater benefits. The dynamic information and communications/operational functionality that utilities get with advanced metering can provide cost savings. They may not be as obvious as eliminating meter reader jobs, but ultimately the savings are much larger.</p>
<h3>Misconceptions About Mass Market Demand Response</h3>
<p>When given a reasonable choice, residential customers consistently have expressed a desire to volunteer for dynamic pricing and other load-reducing options. This includes millions of customers who have participated in air-conditioner load control, and tried time-of-use prices. For example, in a nationwide survey conducted in 2000, 43 percent of consumers said they were interested in time-of-use prices.<sup>9</sup> Moreover, residential consumers are more price-responsive than other customer groups, according to the Department of Energy and others. ()<sup>10</sup></p>
<p>Yet another misconception, particularly among legislators, is that price signals and time-of-use rates in the residential sector mean that consumers will be forced into the spot market and required to monitor and actively manage their consumption on an hourly basis. This misconception surfaces particularly when real-time pricing is used in general policy discussions as a proxy for the entire range of time-based pricing. The political reaction to this is understandably negative-but active consumer monitoring is not what is being talked about in terms of price-responsive, mass-market programs. Care must be taken to convey the nature of the programs correctly and avoid confusion that could hamper movement forward in this area.</p>
<p>Incentivize Utility Action and Performance</p>
<p>It has been some time since John Rowe, then-CEO of New England Electric System, made his famous statement that "the rat must smell the cheese" if demand-side programs are to be vigorously pursued and optimally run by utilities. Demand-side management now has evolved into demand response, which involves a utility offering new and different rates, and incurring costs for the advanced metering and communications technology needed to implement them. Both utilities and state regulators should look at how utilities might be provided with incentives (carrots instead of sticks) to help them move forward in this area. Whether advanced metering and dynamic pricing are the chicken or the egg, respectively, state regulators need to move directly to preparing a meal for general customer consumption.</p>
</p>
<ol>
<li>Steven Braithwait and Ahmad Faruqui, "Demand Response-The Forgotten Solution to California's Energy Crisis," EPRI, February 1, 2001. </li>
<li>This functionality is specified in pending federal legislation. </li>
<li>McKinsey &amp; Company, "The Benefits of Demand-Side Management and Dynamic Pricing," May 2001. </li>
<li>Penny Gullekson, Puget Sound Energy, reported at California Energy Commission Demand Response Workshop, March 15, 2002. </li>
<li>Arthur Andersen, "Cost Impact of Competitive and Network Metering in New York State-Final Report," for New York Department of Public Service, November 1998</li>
<li>Order Instituting Rulemaking, Docket # 02-06-001, California Public Utilities Commission, June 6, 2002. </li>
<li> Id. </li>
<li> Order Instituting Informational and Rulemaking Proceeding, Docket # 02-DemandResponse-01, California Energy Commission, July 17, 2002. </li>
<li>Power Perceptions, August 2000. </li>
<li>Bay Area Economic Forum, "The Bay Area-A Knowledge Economy Needs Power," April 2001. </li>
</ol>
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<a href="/tags/ahmad-faruqui">Ahmad Faruqui</a><span class="pur_comma">, </span><a href="/tags/amr">AMR</a><span class="pur_comma">, </span><a href="/tags/automatic-meter-reading">Automatic meter reading</a><span class="pur_comma">, </span><a href="/tags/benefits">Benefits</a><span class="pur_comma">, </span><a href="/tags/california-energy-commission">California Energy Commission</a><span class="pur_comma">, </span><a href="/tags/california-public-utilities-commission">California Public Utilities Commission</a><span class="pur_comma">, </span><a href="/tags/commission">Commission</a><span class="pur_comma">, </span><a href="/tags/congress">Congress</a><span class="pur_comma">, </span><a href="/tags/cost">Cost</a><span class="pur_comma">, </span><a href="/tags/cpuc">CPUC</a><span class="pur_comma">, </span><a href="/tags/demand-response">Demand response</a><span class="pur_comma">, </span><a href="/tags/demand-side">Demand-side</a><span class="pur_comma">, </span><a href="/tags/demand-side-management-0">Demand-side management</a><span class="pur_comma">, </span><a href="/tags/department-energy">Department of Energy</a><span class="pur_comma">, </span><a href="/tags/economy">Economy</a><span class="pur_comma">, </span><a href="/tags/electric-power-research">Electric Power Research</a><span class="pur_comma">, </span><a href="/tags/electric-power-research-institute">Electric Power Research Institute</a><span class="pur_comma">, </span><a href="/tags/electric-power-research-institute-epri">Electric Power Research Institute (EPRI)</a><span class="pur_comma">, </span><a href="/tags/epri">EPRI</a><span class="pur_comma">, </span><a href="/tags/ferc">FERC</a><span class="pur_comma">, </span><a href="/tags/infrastructure">Infrastructure</a><span class="pur_comma">, </span><a href="/tags/john-rowe">John Rowe</a><span class="pur_comma">, </span><a href="/tags/load-reduction">Load reduction</a><span class="pur_comma">, </span><a href="/tags/naruc">NARUC</a><span class="pur_comma">, </span><a href="/tags/national-association-regulatory-utility-commissioners">National Association of Regulatory Utility Commissioners</a><span class="pur_comma">, </span><a href="/tags/network">Network</a><span class="pur_comma">, </span><a href="/tags/new-england-electric-system">New England Electric System</a><span class="pur_comma">, </span><a href="/tags/nopr">NOPR</a><span class="pur_comma">, </span><a href="/tags/pjm">PJM</a><span class="pur_comma">, </span><a href="/tags/puget-sound-energy">Puget Sound Energy</a><span class="pur_comma">, </span><a href="/tags/recovery">Recovery</a> </div>
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Sun, 15 Sep 2002 04:00:00 +0000puradmin11492 at https://www.fortnightly.comNews Digesthttps://www.fortnightly.com/fortnightly/2000/11/news-digest
<div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>FERC Docket ER00-3583, protest filed Sept. 22, 2000, letter order issued Oct. 5, 2000</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - November 1 2000</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><blockquote><h1 align="center">News Digest</h1>
<p><center> </center> <center><br />
<p align="left"> </p>
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<h2>Transmission &amp; ISOs </h2>
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<p align="left"> <b>Arizona System Administrator.</b> The Federal Energy Regulatory Commission told representatives of the Arizona Independent System Administrator that its proposed package of tariff and protocols was deficient, as it failed to show how Arizona Public Service and Tucson Electric (the ISA's two leading members) would amend their own open-access transmission tariffs (OATTs) to coordinate operations with the ISA. </p>
<p align="left">Meanwhile, a group of irrigation districts in Arizona attacked the ISA plan, challenging the ISA's claim that it is exempt from filing its own OATT, and claiming that the ISA itself lacks legal standing, since local state court in Maricopa County last summer struck down the state PUC's entire regulatory scheme for electric deregulation (which included plans for the ISA), saying that the rules were never certified by the state attorney general. </p>
<p align="left">Unlike other ISO proposals, the Arizona ISA is designed expressly (and only) to facilitate the state's plan for retail electric choice, and says it will operate only as an interim agency, pending formation of the Desert Star Regional Transmission Organization. The ISA plans to reserve 300 megawatts of firm transmission capacity provided by its members for competitive service offerings for consumers, called allocated retail network transmission (ARNT), which comes out of capacity already dedicated to retail service by the various utility transmission providers. Thus the ISA claims it need not file an OATT with the FERC, since it will not own, maintain or control transmission facilities, and since it believes that its ARNT concept "will not impede any wholesale uses of the system." </p>
<p align="left">Salt River Project, the largest Arizona utility remaining outside the ISA (and working with others to form Desert Star), has not opposed the plan, but has its doubts. </p>
<p align="left">"SRP is concerned that in acting upon the ISA's filing, the FERC may inadvertently _ circumvent the ongoing stakeholder process with Desert Star." . </p>
<p align="left"><b>Locational Marginal Pricing.</b> The FERC reaffirmed its November 1997 order that approved the PJM ISO, denying virtually every material request for rehearing or modification, including attacks on PJM's model for locational marginal pricing, its designation of zones for zonal license plate pricing, and its allocation of fixed transmission rights (FTRs) to hedge against congestion costs (but see story below). . </p>
<p align="left"><b>PJM Congestion Rights. </b>The FERC accepted an offer from the PJM Interconnection to remove "grandfather" preferences and reallocate fixed transmission rights (FTRs) on a load-ratio basis effective June 2001, marking a partial victory for Old Dominion Electric Co-op, which had claimed injury from locational marginal pricing (LMP) and an alleged preferential allocation of FTRs for hedging grid congestion to vertically integrated investor-owned electric utilities. . </p>
<p align="left"><b>Michigan Transco.</b> The FERC OK'd a proposal by DTE Energy Co., to form a stand-alone, for-profit transmission company known as International Transmission Co. with an unusual rate structure, despite the drawback that ITC had not yet turned over control of grid facilities to an approved regional transmission organization. </p>
<p align="left">Concurring commissioner Linda Breathitt admitted that approval was "difficult" without an RTO structure, but rationalized that DTE was taking "true and sure steps" toward participating in an RTO. </p>
<p align="left">The innovative rate structure will set transmission rates equivalent to the transmission component embedded in the bundled retail rates of the former vertically integrated utility, thus essentially freezing transmission rates until 2006, when a state-mandated freeze on retail electric rates would be lifted. </p>
<p align="left">The FERC decided that if ITC should fail to become independent of Detroit Edison within 24 months and does not join an approved RTO by Dec. 15, 2001, then it must pay refunds with interest on all transmission service provided under the new rates. ITC, a member of the proposed Alliance RTO, agreed not to challenge a FERC order assigning it to an RTO of the FERC's choosing should it fail to satisfy the RTO commitment. . </p>
<p align="left"><b>Midwest Membership Shuffles.</b> Illinois Power announced on Sept. 20 that it would withdraw from the Midwest Independent System Operator to join the for-profit Alliance Regional Transmission Operator, saying it wanted to align the company with other utilities with more experience with deregulation. </p>
<p align="left">"[The fact that many members operate in retail choice states] alone makes the Alliance RTO a better tool to help promote competition in Illinois," said Kathy L. Patton, Illinois Power vice president and general counsel. "Our decision was also influenced by other benefits provided by the Alliance RTO, including price certainty and the elimination of stacked or 'pancaked' rates. Furthermore, as a for-profit entity, the Alliance RTO has the incentive to move power economically, efficiently, and effectively." </p>
<p align="left">The MISO charter allows for member withdrawal if ownership of the transmission assets changes_a requisite met by the February merger of Illinova Corp., Illinois Power's former parent company, and Dynegy Inc. </p>
<p align="left">The next day, Sept. 21, the MISO board OK'd three new applicants for ISO membership as non-transmission owner members: Indeck-Rockford LLC, an exempt wholesale generator, and power marketers Conectiv Energy Supply Inc. and Tenaska Power Services Co., bringing to 28 the number of non-transmission owners participating in MISO. </p>
<p align="left"><b>NY Cash Infusion.</b> The New York PSC--giving the matter emergency treatment--OK'd an additional $38 million in working capital for the New York ISO in the form of revolving credit, boosting the ISO's total line of credit from $12 million to $50 million. The PSC also OK'd a bridge loan that will provide working capital until the revolver has been implemented. </p>
<p align="left">"[U]nless the credit facilities are approved quickly, the NY ISO may not have enough cash on hand to pay its bills," the PSC said. . </p>
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<h2>Power Markets</h2>
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<p><b>Cost-Based Re-regulation.</b> The California Municipal Utilities Association asked the FERC to re-impose traditional cost-based rates on everyone selling into California's wholesale power markets. </p>
<p>CMUA would have the FERC suspend market-pricing mechanisms by the California Power Exchange and Independent System Operator, on the grounds that wholesale power markets in California are not sufficiently competitive to rely on competition as a substitute for a "just and reasonable" rate, as required by the Federal Power Act. </p>
<p>"Some may argue that 'the toothpaste cannot be put back into the tube,'" said the group. "CMUA does not discount the difficulties ... but asks, 'Difficult compared to what?'" . </p>
<p><b>Virtual Trading.</b> The FERC ordered the New York ISO to report back by Jan. 1 on a plan to allow bidding by nonphysical market participants (those not serving actual load) in the ISO's day-ahead and real-time energy markets. The FERC predicted that virtual bidding was not a matter of "if," but "when." Nevertheless, it warned of difficulties in software conversion. "It is imprudent," said the FERC, "to introduce sudden overrides and quick fixes." Morgan Stanley had complained that the NY ISO policy barring power marketers and other so-called "virtual" players from bidding had harmed power marketers by limiting them from hedging risks from price swings between the day-ahead and real-time markets, thus reducing liquidity, impeding efficiency, and distorting prices. . </p>
<p><b>California Price Spikes.</b> In a statement released at the FERC's field hearing held in San Diego to address last summer's high power prices in California, San Diego Gas &amp; Electric Co. said that reform proposals now under discussion at the California ISO mark "a step backward" that will "perpetuate an inherently inefficient" market design. </p>
<p>"The ISO's stakeholder process is producing flawed reform proposals," said SDG&amp;E. "We will protest the ISO staff's reform proposals if they are filed at FERC as currently contemplated." </p>
<p>SDG&amp;E submitted detailed evidence of pricing anomalies at the Power Exchange and the ISO, and blamed the problem on what it called California's "unique de-centralized approach" to market coordination, which relies on private scheduling coordinators to take the lead role in managing congestion, instead of handing that job to the ISO itself, as is done generally in the U.S. Northeast. </p>
<p>Earlier, on Aug. 31, Sempra Energy (SDG&amp;E's parent company) had joined with two consumer advocacy groups in California (TURN and UCAN) to submit a formal white paper to the California ISO CEO Terry winter and the ISO board of governors. The white paper offers a comprehensive proposal for reforming the ISO market, and describes in great detail the various internal reform proposals under discussion at the ISO itself. </p>
<p>That study, "Comments on the Congestion Management Proposals of the California ISO," was prepared by Scott M. Harvey, managing director, LECG/Navigant Consulting Inc., and professor William W. Hogan, of Harvard University. </p>
<p>"We conclude," say Hogan and Harvey, "that the basic reform approaches recommended by the California ISO are not likely to support an efficient market. ... [T]he CAISO proposals suffer from a systematic failure to address the most fundamental requirements of effective congestion management." </p>
<p>Instead of addressing the FERC concerns, Hogan and Harvey predicted that current ISO proposals would create new problems: </p>
<ul>
<li> Commitment decisions pushed further forward in time. </li>
<li> Market complexity and higher operating costs. </li>
<li> Higher transaction costs for hedging congestion with fixed transmission rights. </li>
</ul>
<p>At the hearing itself, TURN lawyer Mike Florio was no more optimistic. He saw virtually no chance of significant reform from within at the California ISO: </p>
<p>"I'm on the ISO board, and it pains me to have to say this, but I don't think you're going to get the kinds of changes that you need with the current structure of that board. In fact, I would say the ISO is incapable of fixing itself. </p>
<p>"We have a board that's mired in self-interest and ideological rigidity that insists that it has to do something different from what the professor from Harvard tells them, even if his market structure works and theirs doesn't. </p>
<p>"You are not going to get any fundamental change in the congestion management reform proposal. We've already had the initial votes at the ISO. And it's clear that the majority there favors maintaining the course of cosmetic changes." </p>
<p>According to UCAN executive director Michael Shames, the FERC faces a moment of crisis. </p>
<p>"I suggest to you, bluntly, that you are on trial [and] in addition ... you need to get new counsel. Because I think frankly your agency is in trouble of losing this case." . </p>
<p><b>New York Price Spikes.</b> In a one-page letter mailed Sept. 5, FERC chairman James Hoecker told New York City Public Advocate Mark Green that the FERC would not open a separate investigation of electric price spikes in the downstate area. "I, like you, am concerned," wrote Hoecker. But the chairman cited FERC orders allowing the New York ISO to set caps and restrictions on bidding in various energy markets, and reasoned that no separate study was needed. </p>
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<p> <b>MAAC Region.</b> The Mid-Atlantic Area Council, the regional reliability council that covers essentially the same region as the PJM Independent System Operator, has OK'd and filed a new governance agreement, reportedly approved by 95 percent of MAAC members, and creating among other things a new energy market committee to examine the interplay of electric reliability and commercial power markets. </p>
<p>MAAC noted that its old governance agreement was behind the times, as it had allowed only 13 full voting members out of a total member role that had swelled to 180, with the addition of many private power producers and marketers. Under the new governance, MAAC will employ an 11-member administrative board and will contract with PJM for administrative support. . </p>
<p><b>Resource Planning.</b> The Iowa board, citing a need to take a "proactive role" in improving the state's energy outlook over the next decade, said it would expand its investigation into transmission and distribution reliability to include generation resource planning. The board noted that the "Mid-Continent Area Power Pool 2000 Load and Capability Report" projects that MidAmerican Energy Co.'s capacity reserve margin will be 16.5 percentonly 1.5 percent above MAPP's 15 percent reserve requirementand that reserve margins are projected to fall below 15 percent by summer 2003. The state's three investor-owned utilitiesIES Utilities Inc., Interstate Power Co., and MidAmericanare to file on or before March 1, 2001 information for 2001 through 2010 on resource planning, reserve capacity projections, and "weather assumptions" used in forecasting load. . </p>
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<p><b>Nuclear Shutdown Costs.</b> The FERC affirmed that on the shutdown of the Connecticut Yankee nuclear plant, the plant owners could recover costs relating to amortization of investment and other matters separate from the decommissioning itself. . </p>
<p><b>Divested Plants.</b> The FERC agreed to hear a complaint filed on June 30 by Allegheny Electric Co-op, accusing Pennsylvania Electric (Pennelec) of charging discriminatory rates for wholesale power supply because the contract rate was based on costs of power plants subsequently sold off under restructuring orders. The FERC set a date of Oct. 1, 2001 for an initial decision in the case. . </p>
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<h2>State PUCs</h2>
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<p> <b>Electric Retail Choice. </b>The District of Columbia PSC took the first major step to implement the city's new law on electric restructuring by mandating that all DC residential electric customers should enjoy retail supply choice by Jan. 1. </p>
<p>The order allows customers to switch back and forth from suppliers to standard offer service as often they wish, but also allows the local utility (Potomac Electric Power Co.) to ask for reconsideration if it can show that such liberal switching allows customers to "game" the system. </p>
<p>The PSC OK'd the use of electronic data interchange (EDI) for data transfers, and a working group will report back on ideas for monitoring market power. . </p>
<p><b>Metering &amp; Billing.</b> Virginia regulators set a public hearing for Nov. 1 to consider a draft plan under its electric restructuring law for the design of retail electric metering and billing services. . </p>
<p><b>Municipalization.</b> In its first decision on the issue, the New York PSC directed a municipality to pay an exit fee (nearly three times the settlement offered by the village) to the regulated investor-owned electric utility to cover the utility's stranded costs resulting from a decision by the village to form its own municipal utility distribution system. </p>
<p>The PSC rejected claims by the village (Lakewood) that stranded costs need only include avoided marginal operating costs, describing that idea as "unfair and contrary to our long-standing policies to discourage uneconomic bypass of the company's delivery system." </p>
<p>The PSC noted that the utility designed and operated its existing system under legal obligations to serve all customers in its territory regardless of cost. "Lakewood unfairly proposes an exit fee as if such requirements never existed," the PSC said. . </p>
<p><b>Natural Gas Commodity Prices.</b> The Kentucky PSC opened an investigation of natural gas prices, which it said had doubled in July from the year before. It will ask whether natural gas local distribution companies are extending best efforts to procure gas for resale at a reasonable cost, and whether they are conducting purchases with affiliates at arm's length. . </p>
<p><b>Gas System Maintenance.</b> The Pennsylvania PUC told the Philadelphia municipal gas utility to develop a plan for more aggressive pipeline inspections, after the PUC took jurisdiction over the municipal utility for the first time under the new state law on natural gas deregulation. "Considering the age of PGW's system, as well as the high density of service connections per mile of main, we are taking extraordinary measures to ensure that safety inspections occur much more frequently than required by federal standards during this initial winter season," the PUC said. . </p>
<p><b>Standard Offer Tariffs.</b> The Arkansas PSC issued guidelines for electric utilities to file standard offer tariffs to carry out the state's plan for electric retail choice, but stressed that it would not OK any final tariff design that would leave standard service customers completely exposed to short-term market volatility. </p>
<p>"A blend of market sources for the standard service package should provide a fixed-price offer over some fixed period," the PSC said, specifying that a yearly rate, a seasonal rate, or an annual schedule of monthly rates may be acceptable. </p>
<p>The PSC also refrained from approving any specific measures to prevent gaming by customers who switch back and forth between services. It said it was more concerned that customers might hesitate "to go shopping if they know they may [have to] pay a higher price when they return," it said. . </p>
<p><b>PX Price Passthroughs.</b> Citing a lack of evidence that the delay resulted in "economic or competitive harm," the California PUC declined to penalize Pacific Gas &amp; Electric Co. for not implementing a previously approved weekly averaging method in calculating the California Power Exchange price for direct access customers. </p>
<p>PG&amp;E had attributed problems with its customer information system to computer upgradea matter also under recent investigation by the PUC. . </p>
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<h2><font color="#FFFFFF">Studies &amp; Reports</font></h2>
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<p> <b>Gas Price Shocks.</b> A "continent-wide response" by industry and government will be needed to address the current natural gas price "shock" and meet the nation's long-term energy supply needs, according to Daniel Yergin, chairman of Cambridge Energy Research Associates, speaking at the Governors' Natural Gas Summit in Columbus, Ohio. </p>
<p>By most utility estimates, the gas shock will force bills higher this winter by 20 percent to 40 percent for residential heating, and from 50 percent to 100 percent for industrial gas use. Yet Yergin distinguished the current "shock" from a bona fide "crisis." </p>
<p>"The resource base in North America remains vast," he noted. "Supply development over the last few years has slowed in response to oil and gas price declines in 1998-99 and the sharp contraction in capital expenditures needed for exploration and production," </p>
<p>Yergin said, adding that production eventually will increase, but it will take time for "the iron law of lead times" to take effect. Yergin added, however, that at the same time that gas production capability in the United States is down some 7 percent since 1997, demand for natural gas is at record highsdue largely to the proliferation of natural gas-fueled electric generation turbines. </p>
<p><b>Load Management.</b> Investor-owned utilities in 1998 spent more than $376 million on load management, according to a study, "Load Management Benchmarking," released by the Edison Electric Institute. The study identifies 27 gigawatts of load reduction potential as of 1998, equivalent to 54 power plants rated at 500 MW each. </p>
<p>"This study confirms that shareholder-owned electric utilities recognize that it makes good business sense to invest in programs that help our customers manageand potentially reducetheir peak load usage on the system," said Michael McGrath, EEI group director, energy services. Contact Dan Riedinger, 202-508-5483. </p>
<p><b>Retail Generation Markets.</b> Competitive retail generation markets in the United States are worth $4 billion annually in eight states with electric choice, with the largest markets in California and Pennsylvania (over $1 billion each), according to estimates from Retail Energy Foresight, a new publication from XENERGY. (Other states included in the group: N.J., N.Y., Mass., Conn., Maine, and Illinois.) </p>
<p>By 2002, competitive retail energy sales will reach at least $12 billion annually, as additional markets open up in Texas and Ohio, according to managing editor Tom Michelman. </p>
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<h2>Courts </h2>
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<p><b>Wheeling Requests.</b> Reversing a federal district judge, a federal appeals court ruled that PacifiCorp had no right to state action immunity against possible antitrust liability where it refused to provide wheeling transmission service to a rural electric cooperative to allow the co-op to supply retail power to a PacifiCorp customers. </p>
<p>The court explained that PacifiCorp failed to justify immunity since Idaho state law exerted no active supervision over state law provisions that sanctioned private agreements to allocate service territories and divide up customers. . </p>
<p><b>Wholesale Gas Procurement.</b> Reversing a state appeals court, the Indiana Supreme Court upheld an order by state utility regulators that allowed natural gas local distribution companies to create a joint venture and limited liability companyknown as ProLiance to take over the existing gas supply contracts and pipeline capacity held by the LDCs and assume responsibility for negotiating new gas supply contracts on behalf of the LDCs, passing gas purchase costs along to them at indexed prices, rather than cost of service. </p>
<p>Certain gas customers had attacked the scheme as an attempt by the LDCs to circumvent state regulation, and because the LDCs had failed to submit the plan under a special state law for governing alternate forms of regulation. . </p>
<p><b>Pilot Programs.</b> The Ohio Supreme Court upheld a ruling by state regulators that allowed an electric utility to devise a pilot program with discount contracts that were not available throughout the utility's service territory. The program had allowed certain Cleveland-area industrial and commercial electric customers to obtain competitive power supply from a nearby municipal supplier. . </p>
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<h2>Business Wire</h2>
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<p> <b>Caminus Corp.</b> and <b>HoustonStreet Exchange</b> have spearheaded the formation of the <b>Energy Trading Standards Group</b>, an open consortium with the goal of developing standards to automate the sale of wholesale energy and improve information sharing between energy trading companies. The ETSG consortium will develop open standards to communicate energy trade data based on extensible markup language (XML) technology for business-to-business Internet commerce. Along with Caminus and HoustonStreet, consortium members include <b>ABB Energy Information Systems</b>, <b>Automated Power Exchange</b>, <b>Open Link Energy</b>, <b>RedMeteor.com Inc.</b>, <b>Triple Point Technology Inc.</b>, <b>GFInet</b>, and <b>Sapient</b>. The companies will initially create standards for exchanging data between online trading platforms and transaction/risk management systems used by wholesale electricity and natural gas trading companies. </p>
<p><b>Altrade Power</b>, an independent online trading exchange operated by <b>Altra Energy Technologies Inc.</b>, set an all-time monthly volume record in August of 18.9 million megawatt-hours, surpassing its previous record of 14.8 million MWh set in February. August also saw a record number of trades. The number of users on Altrade Power has increased by 25 percent since the beginning of the year, despite slower adoption rates for online trading among power traders as compared to traders of other commodities. </p>
<p><b>American Superconductor</b> and <b>GE Industrial Systems</b>, which have formed an alliance to market and sell Distributed Superconducting Magnetic Energy Storage systems as a co-branded product to utilities to improve power grid reliability, have received their first order for a D-SMES system. The first buyer of the system was <b>Entergy Corp.</b>, which will deploy the system in one of its power grids in Texas in early 2001. </p>
<p><b>Sempra Energy Trading</b> has opened an office in Madrid under the name <b>Sempra Energy Europe España</b>. Sempra Energy Trading established operations in Spain to take advantage of the wholesale market opportunities in the newly deregulated Spanish electricity market. </p>
<p><b>PG&amp;E Corp.'s National Energy Group</b> hosted a ribbon-cutting ceremony marking the beginning of commercial operation of the largest wind power plant in the eastern United States, an 11.5-MW facility in Madison County, N.Y. The project is located on farmland and consists of seven Vestas 1.65-MW wind turbines. The plant is New York's first commercial wind farm. </p>
<p><b>USEC Inc.</b> has signed an agreement with the <b>U.S. Department of Energy</b> to begin designing a new gas centrifuge based on the uranium enrichment technology developed by DOE in the 1980s. This work will enable the company to determine the feasibility of deploying a centrifuge plant in the United States, while continuing to review other technology options. </p>
<p><b>The Shaw Group Inc.</b> and <b>Entergy Corp.'s</b> non-utility wholesale operating group have signed a definitive agreement creating <b>EntergyShaw LLC</b>, a new company that will provide management, engineering, procurement, construction, and commissioning services to build electric power plants worldwide. Jim Early, a senior vice president of Shaw, has been appointed president. </p>
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<h2>Mergers &amp; Acquisitions</h2>
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<p><b>National Grid</b> + <b>Niagara Mohawk.</b> Great Britain's National Grid on Sept. 5 announced that it will acquire New York-based Niagara Mohawk for $3 billion. National Grid recently acquired New England Electric System, which holds four electric distribution companies in Rhode Island, Massachusetts, and New Hampshire. </p>
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<div class="field-items">
<a href="/tags/abb">ABB</a><span class="pur_comma">, </span><a href="/tags/american-superconductor">American Superconductor</a><span class="pur_comma">, </span><a href="/tags/arizona-public-service">Arizona Public Service</a><span class="pur_comma">, </span><a href="/tags/benchmarking">Benchmarking</a><span class="pur_comma">, </span><a href="/tags/billing">Billing</a><span class="pur_comma">, </span><a href="/tags/caiso">CAISO</a><span class="pur_comma">, </span><a href="/tags/citi">Citi</a><span class="pur_comma">, </span><a href="/tags/commission">Commission</a><span class="pur_comma">, </span><a href="/tags/conectiv-energy">Conectiv Energy</a><span class="pur_comma">, </span><a href="/tags/cost">Cost</a><span class="pur_comma">, </span><a href="/tags/dc">DC</a><span class="pur_comma">, </span><a href="/tags/department-energy">Department of Energy</a><span class="pur_comma">, </span><a href="/tags/detroit-edison">Detroit Edison</a><span class="pur_comma">, </span><a href="/tags/dg">DG</a><span class="pur_comma">, </span><a href="/tags/doe">DOE</a><span class="pur_comma">, </span><a href="/tags/dominion">Dominion</a><span class="pur_comma">, </span><a href="/tags/dte-energy">DTE Energy</a><span class="pur_comma">, </span><a href="/tags/dynegy">Dynegy</a><span class="pur_comma">, </span><a href="/tags/edison-electric-institute">Edison Electric Institute</a><span class="pur_comma">, </span><a href="/tags/entergy">Entergy</a><span class="pur_comma">, </span><a href="/tags/fcc">FCC</a><span class="pur_comma">, </span><a href="/tags/federal-energy-regulatory-commission">Federal Energy Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/federal-power-act">Federal Power Act</a><span class="pur_comma">, </span><a href="/tags/ferc">FERC</a><span class="pur_comma">, </span><a href="/tags/ge">GE</a><span class="pur_comma">, </span><a href="/tags/grid-reliability">grid reliability</a><span class="pur_comma">, </span><a href="/tags/interconnection">Interconnection</a><span class="pur_comma">, </span><a href="/tags/investor-owned-utilities">Investor-owned utilities</a><span class="pur_comma">, </span><a href="/tags/iso">ISO</a><span class="pur_comma">, </span><a href="/tags/it">IT</a><span class="pur_comma">, </span><a href="/tags/itc">ITC</a><span class="pur_comma">, </span><a href="/tags/kentucky-psc">Kentucky PSC</a><span class="pur_comma">, </span><a href="/tags/lmp">LMP</a><span class="pur_comma">, </span><a href="/tags/midamerican">MidAmerican</a><span class="pur_comma">, </span><a href="/tags/miso">MISO</a><span class="pur_comma">, </span><a href="/tags/morgan-stanley">Morgan Stanley</a><span class="pur_comma">, </span><a href="/tags/national-grid">National Grid</a><span class="pur_comma">, </span><a href="/tags/navigant">Navigant</a><span class="pur_comma">, </span><a href="/tags/navigant-consulting">Navigant Consulting</a><span class="pur_comma">, </span><a href="/tags/new-england-electric-system">New England Electric System</a><span class="pur_comma">, </span><a href="/tags/new-york-psc">New York PSC</a><span class="pur_comma">, </span><a href="/tags/nuclear">Nuclear</a><span class="pur_comma">, </span><a href="/tags/oatt">OATT</a><span class="pur_comma">, </span><a href="/tags/pacific-gas-electric">Pacific Gas &amp; Electric</a><span class="pur_comma">, </span><a href="/tags/pacificorp">PacifiCorp</a><span class="pur_comma">, </span><a href="/tags/pge">PG&amp;E</a><span class="pur_comma">, </span><a href="/tags/pjm">PJM</a><span class="pur_comma">, </span><a href="/tags/potomac-electric-power">Potomac Electric Power</a><span class="pur_comma">, </span><a href="/tags/re-regulation">Re-regulation</a><span class="pur_comma">, </span><a href="/tags/reliability">Reliability</a><span class="pur_comma">, </span><a href="/tags/rto">RTO</a><span class="pur_comma">, </span><a href="/tags/san-diego-gas-electric">San Diego Gas &amp; Electric</a><span class="pur_comma">, </span><a href="/tags/san-diego-gas-electric-0">San Diego Gas &amp; Electric</a><span class="pur_comma">, </span><a href="/tags/sdge">SDG&amp;E</a><span class="pur_comma">, </span><a href="/tags/sempra">Sempra</a><span class="pur_comma">, </span><a href="/tags/sempra-energy">Sempra Energy</a><span class="pur_comma">, </span><a href="/tags/shaw-group">Shaw Group</a><span class="pur_comma">, </span><a href="/tags/shaw-group-0">Shaw Group</a><span class="pur_comma">, </span><a href="/tags/tariffs">Tariffs</a><span class="pur_comma">, </span><a href="/tags/technology">Technology</a><span class="pur_comma">, </span><a href="/tags/shaw-group-1">The Shaw Group</a><span class="pur_comma">, </span><a href="/tags/transco">Transco</a><span class="pur_comma">, </span><a href="/tags/transmission">Transmission</a><span class="pur_comma">, </span><a href="/tags/us-department-energy">U.S. Department of Energy</a><span class="pur_comma">, </span><a href="/tags/usec">USEC</a><span class="pur_comma">, </span><a href="/tags/usec-inc">USEC Inc.</a><span class="pur_comma">, </span><a href="/tags/vestas">Vestas</a> </div>
</div>
Wed, 01 Nov 2000 05:00:00 +0000puradmin10750 at https://www.fortnightly.comNews Digesthttps://www.fortnightly.com/fortnightly/2000/05-0/news-digest
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Mergers &amp; Acquisitions</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Docket No. EC00-26-000, 91 FERC ¶61,036, April 12, 2000.</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - May 15 2000</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><blockquote><h1 align="center">News Digest</h1>
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<h3>Mergers &amp; Acquisitions</h3>
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<p><b>PECO + UNICOM. </b>The Federal Energy Regulatory Commission OK'd the merger of PECO Energy and Commonwealth Edison, to form Exelon, though it admitted that the deal would boost the merged company's control of generation capacity in the ComEd destination market far above acceptable levels, as defined in the commission's Appendix A screen measuring market power. </p>
<p>The FERC explained that the merged company would have little potential to manipulate prices by withholding capacity from markets, since almost all of the merged company's economic generating capacity would be made up of low-cost but inflexible base-load nuclear plants, which would be difficult to ramp up or ramp down quickly. </p>
<p>Meanwhile, on March 24, PECO submitted a merger settlement agreement to the Pennsylvania PUC that set numerous benchmarks and performance standards for reliability and service quality in that state, but that would not apply in Illinois, which has no authority to review the deal, because essentially it represents a takeover of Unicom by PECO. </p>
<p>The settlement proposal in Pennsylvania prompted Illinois commission chairman Richard Mathias on April 17 to fire off letters to John Rowe, the president and CEO of ComEd, and to company executive Carl Croskey, asking whether the merged company would apply the Pennsylvania reliability standards in Illinois as well, and demanding an explanation of how ComEd would correct its "numerous power outages" and use common indexes such as SAIFI, CAIDI, and MAIFI to gauge reliability performance in Illinois. </p>
<p>The letter to Rowe showed that Mathias was clearly frustrated that Pennsylvania regulators were running the show: "It is interesting to note that if this transaction closes, Illinois electric utilities serving well over 90 percent of Illinois consumers will have been sold to out-of-state companies." </p>
<p><b>AEP + C&amp;SW.</b> To comply with the FERC's March 15 order approving their merger (which imposed conditions on membership in a regional transmission organization), American Electric Power and Central and South West signed an agreement authorizing the Southwest Power Pool to post data on AEP's OASIS node, showing SPP's independent calculations of short- and long-term ATC (available transmission capacity) on the AEP grid, and also to have SPP process all requests for transmission service under AEP's open-access transmission tariff. </p>
<p>In addition, AEP has hired Douglas R. Bohi of Charles River Associates to lead a team in developing a plan to monitor any anticompetitive effects stemming from the merger, until the merged utility joins a fully functional RTO. The team will monitor at least seven distinct indicators: </p>
<ul>
<li>. Hourly output of AEP generating resources;</li>
<li>Transmission limits and deratings on AEP flowgates or other facilities showing constraints within the last two years;</li>
<li> Hourly power flows over flowgates and constrained grid facilities;</li>
<li> Generation redispatch actions by AEP to manage grid congestion;</li>
<li> For both generation and transmission facilities; </li>
<li> Comparisons showing the effects of AEP action to manage congestion or impose TLR curtailments (transmission loading relief) on wholesale power transactions involving AEP and its affiliated marketers; and</li>
<li> . Effects of such AEP action (see previous item) on the level of transactions and prices in the market as a whole.</li>
</ul>
<p>Bohi served previously as chief economist and director of the office of economic policy at the FERC. His team will submit semi-annual reports to the commission. </p>
<p><b>Lyonnaise + United Water Resources.</b> Connecticut regulators OK'd the acquisition of United Water Resources Inc., the nation's second-largest water services company, by Lyonnaise American Holding Company Inc., a subsidiary of the French company Suez Lyonnaise des Eaux. </p>
<p><b>NEES + EUA.</b> Regulators in Massachusetts OK'd the merger between New England Electric System and Eastern Utilities Associates. </p>
<p>Distribution rates will be capped for five years, through February 2005. Then rates would be adjusted annually, through 2009, using an index of average distribution rates in New England, New York, New Jersey, and Pennsylvania. </p>
<p><b>Leveraged Buyouts.</b> In reviewing Warren Buffet's leveraged buyout of MidAmerican Energy Holdings Co., the Iowa board declined to attach conditions to protect utility ratepayers from the cost of any acquisition premium, which some say could exceed $1 billion. It said the question was best left to a future rate case. </p>
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<h3 align="left">Power Plants</h3>
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<p><b>Nuke Plant Premium.</b> The New York Power Authority trustees on March 28 approved the sale of NYPA's Indian Point 3 and James A. FitzPatrick nuclear power plants to Entergy Corp. of New Orleans for $967 million, a record for the United States nuclear industry. The payment of $536 per kilowatt is almost four times greater than the previous high for a nuclear plant transaction and is comparable to those for recent sales of fossil-fueled power plants. </p>
<p><b>Hydro Expansion.</b> Claiming that there are 21,300 megawatts of potential hydropower that could be developed without building a single new dam, Rep. John Shadegg (R-Ariz.) said that the future of hydropower rests in its expansion. </p>
<p>"Hydropower will only survive if it expands; otherwise, the loss of generation capacity in each license renewal will slowly but surely reduce the amount of hydropower produced," he said, addressing the National Hydropower Association's annual conference on April 4. </p>
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<h3 align="left">Courts</h3>
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<p><b>QF Contracts.</b> A federal appeals court ruled that federal law does not preempt electric utilities from enforcing a "regulatory-out" clause against qualifying cogeneration facilities (QFs) to require a renegotiation of the price of power if regulators later bar the utility from recovering the cost of power purchased from the QF. </p>
<p><b>Emissions Allowances</b>. A federal appeals court ruled that an industrial customer of an electric utility did not qualify under the Clean Air Act as a "joint owner" of a utility power plant, and thus was not entitled to receive a share of emissions allowances, because the customer had not reserved energy from a specified generating unit, nor agreed to pay a proportional amount of unit-specific operating costs. </p>
<p><b>Outage Liability.</b> A Texas appeals court affirmed a trial court decision granting class action certification for customers of Entergy Gulf States Inc. in connection with power outages triggered by a January 1997 ice storm. </p>
<p><b>Gas Manufacturing Sites</b>. An Illinois appellate court affirmed a circuit court's ruling in favor of four families who lived near the site of a former gas manufacturing facility and who sought compensatory and punitive damages for negligence and nuisance from Central Illinois Public Service Co., after a child in each family was afflicted with neuroblastoma, a cancer of the peripheral nervous system. </p>
<p>The court rejected the utility's argument that because there was no known cause of neuroblastoma, and because the carcinogens found at the site had not been linked directly to the affliction, the testimony of an expert witness on toxicology and epidemiology was inadmissible. </p>
<p>It said that under Illinois law, "[W]hen the cause or etiology of a specific disease is not known, or is otherwise unclear, proof of causation is not quite as stringent." It added that on a statistical basis, "The fact that four Christian County children developed neuroblastoma within the span of a little over two years is overwhelming." </p>
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<h3 align="left">Gas Pipelines</h3>
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<p><b>Pro Forma Tariffs.</b> The FERC extended the deadline for natural gas pipelines to file tariff sheets to comply with Order 637, issued Feb. 9, so that shippers who take service from multiple pipelines can comment more effectively on the filed tariffs. </p>
<p>The FERC set a staggered schedule, with 33 pipelines required to file by June 15 (including ANR, Columbia, El Paso, and Kinder Morgan), another 33 by July 17 (Iroquois, Maritimes &amp; Northeast, Natural Gas Pipeline Co., and Northern Border), and the last 34 by Aug. 15 (Tennessee, Texas Eastern, Transco, Trunkline, and Williams). </p>
<p><b>Service Changes.</b> A federal appeals court remanded a FERC order regarding gas pipeline service classifications, finding no need to require Transcontinental Gas Pipeline Corp. to hold an "open season" to allow customers receiving "essentially firm" transportation with a volumetric charge (ever since it dropped bundled commodity service following Order 636) to choose between interruptible service or a new two-part firm service with separate usage and reservation charges. </p>
<p>The court questioned why customers, "having already elected firm service, must now be asked, 'Firm service - is that your final answer?'" </p>
<p>Judge Randolph dissented, saying that customers still needed to choose between one- and two-part service. </p>
<p><b>Pipeline Competitors.</b> A federal appeals court ruled that the FERC need not treat as mutually exclusive two competing projects to construct natural gas gathering pipelines in the Gulf of Mexico, nor review them in a single consolidated case. </p>
<p>The case involved ANR Pipeline Co., which sought to build a gathering line from "Block 207" to Garden City, La., and block a competing project by affiliates of Manta Ray Offshore Gathering Co. </p>
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<h3 align="left">Congress</h3>
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<p><b>Global Climate Change.</b> Sen. Frank H. Murkowski (R-Alaska) held hearings March 30 on two bills (S. 1776, S. 882) that urge voluntary emission reductions rather than concerted government action to address the possibility of global climate change, but Dr. Daniel Lashof, senior scientist at the Natural Resources Defense Council, said that most electric utility industry claims of reductions in CO2 emissions from power plants are "fanciful," as they reflect only a switch to nuclear power. </p>
<p>In their paper, "Less Than Meets the Eye: An Analysis of Greenhouse Gas Emission 'Reductions' Reported by Electric Utilities," released by NRDC in March, Lashof and David Hawkins summarized their findings based on voluntary reports of emissions reductions submitted by electric utilities under sec. 1605b of the Energy Policy Act of 1992: </p>
<ul>
<li> CO2 emission from electric power plants increased by more than 15 percent between 1990 and 1998.</li>
<li> Utilities reported 120 million tons of emission reductions for 1998, which, given the continuing increases in actual emissions during the 1990s, "is not plausible."</li>
<li>. For those utility companies reporting the largest CO2 reductions and identifying the source of such reductions, some 90 percent of the reductions were attributable to greater nuclear output.</li>
<li> Only a small fraction of reported emission reductions are attributable to improvements in heat rates at coal-fired power plants.</li>
<li> If heat-rate improvements at coal-fired units are accompanied by increased dispatch, then system-wide emission are likely to increase, rather than fall.</li>
</ul>
<p>Gen. Richard Lawson, president and CEO of the National Mining Association, countered that a consortium of U.S. and Canadian coal interests and researchers at the Los Alamos laboratory (known as the Zero Emission Coal Alliance, or ZECA) plans within five years to release a pilot project using a technology that would create hydrogen from a coal-water slurry for use in fuel cells, producing a "pure stream" of CO2 that could be permanently sequestered through a chemical reaction with magnesium oxide. </p>
<p>For testimony of other witnesses, from the Department of Energy, Environmental Protection Agency, Edison Electric Institute, Electric Power Research Institute, National Academy of Sciences, and others, see <a href="http://energy.senate">http://energy.senate</a>. gov/hearings. </p>
<p><b>Electric System Reliability.</b> Sen. Murkowski also held hearings April 11 on S.2098, the Electric Power Market Competition and Reliability Act, where General Counsel David Cook of the North American Electric Reliability Council repeated findings of a recent NERC survey that several control area operators in the Eastern Interconnection were "leaning" on the interconnection during nine peak hours (i.e., selling energy that they didn't have). </p>
<p>Cook cited Cinergy as "the most serious." As he noted, "Cinergy's 'Inadvertent Interchange,' a measure of the difference between Cinergy's generation plus scheduled purchases and sales, ranged from minus 79 megawatts to minus 1,656 MW during the nine hours, averaging more than 1,000 MW. ... During the nine-hour NERC survey, the lowest frequency noted was 59.9524 hertz. ... Under-frequency load shedding begins at 59.82 Hz, with about 10 percent of every control area's customer load automatically disconnected with no warning to customers." </p>
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<h3 align="left">Nuclear Power</h3>
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<p><b>License Renewal.</b> A federal appeals court turned down a bid by an advocacy group to review a decision by the Nuclear Regulatory Commission that had denied permission to the group to intervene in the relicensing case for the Calvert Cliffs, Md. nuclear plant, after the group had failed to meet a deadline that had already been extended once, and after the NRC clearly had announced a policy of not granting extensions except in "unavoidable and extreme circumstances." </p>
<p>Earlier, on March 23, the NRC had announced that it had renewed the operating licenses for the two units of the Calvert Cliffs plant for an additional 20 years, the first license extensions granted to a commercial nuclear plant. </p>
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<h3 align="left">State PUCs</h3>
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<p align="left"><b>Distributed Generation.</b> On April 12, led by staffers Jay Morse and Anthony Mazy, the Office of Ratepayer Advocates of the California PUC filed its phase I testimony in the PUC's current rulemaking on distributed generation, predicting that DG increasingly will cause California's electric utility industry to "honeycomb" into an Internet-based network of macro and local micro-markets - but that monopoly power likely will increase. </p>
<p align="left">The ORA said it was "intrigued" that DG projects could bid against expansion of the transmission and distribution grid, "placing T&amp;D expansion in the marketplace." It urged a separate dispatch of distribution and distributed generation, and claimed that utility ownership of DG facilities would violate accounting rules at both the PUC and the FERC. </p>
<p align="left">"The question before the PUC," said the ORA, " is whether the supply of local generation service to compensate for inadequate distribution capacity is going to be considered a generation function or a bundled distribution function, as some utilities propose." Other parties filing comments included Enron, TURN, NewEnergy, and the three regulated utilities, San Diego Gas &amp; Electric, Pacific Gas &amp; Electric, and Southern California Edison. </p>
<p align="left"><b>Retail Electric Choice.</b> Effective April 6, the Ohio PUC adopted electric restructuring rules concerning certification of competitive providers , nuclear decommissioning compliance , minimum competitive standards for retail electric service and reliability , electric utility market monitoring , safety standards , rules for long-term forecasts , and alternative dispute resolution . </p>
<p align="left"><b>Water Utility Risk.</b> Connecticut regulators authorized Connecticut-American Water Co. to raise rates, but it rejected a proposed 0.5 percent adder to return on equity (above the authorized 10.65 percent), given the company's positive financial performance, "as illustrated by its lack of need for rate relief for over four years." . </p>
<p align="left"><b>Billing Systems.</b> With retail choice in electricity set to begin in Delaware in October, state regulators opened a docket to review billing services and procedures at Delmarva Power &amp; Light Co., prompted by hundreds of complaints filed by customers, for such things as overbilling and failure to notify customers of direct debits against accounts. The PSC will examine whether the company's troubled new "C3" billing system can handle the added demands of a competitive regime. </p>
<p align="left"><b>Michigan Retail Access.</b> After observing the first three rounds of bidding by electric customers seeking to join the state's voluntary program for retail electric choice, the Michigan PSC modified procedures to bar winning bidders from forfeiting a higher-priced bid to activate a lower-priced bid. If the holder of a winning bid forfeits rights to any capacity under that bid, all losing bids will be disqualified. </p>
<p align="left"><b>Computer Modeling.</b> Nevada Power Co. has asked the Nevada PUC to approve a change in its population forecasts computer model for its 2000 Resource Plan from "MODELER" to "REMI," because REMI, it says, is more sophisticated, less expensive, and has become the standard model for population forecasts. The plan is scheduled to be filed at the PUC on or before July 1, 2000. </p>
<p align="left"><b>Electric Retail Choice. </b>With the state legislature having adopted its plan for electric retail choice on March 11, the West Virginia PSC is soliciting comments on various issues, including (1) supplier licensing rules, (2) codes of conduct, (3) separation of generation from transmission and distribution, (4) consumer protection, and (5) distributed generation and interconnection standards. It plans to issue proposed rules by August. </p>
<p align="left"><b>Electronic Data</b>. Initial comments are due May 19 at the Arkansas PSC on a proceeding to set rules governing the electronic exchange of data. A public hearing is set for June 27, with a final ruling due on or before Aug. 14. </p>
<p align="left"><b>Alabama Restructuring.</b> In April the Alabama PSC was set to open the first round of public hearings on electric utility restructuring. </p>
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<h3 align="left">Transmission &amp; ISOs</h3>
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<p><b>California ISO Tariffs.</b> On April 10 the California Independent System Operator filed its 660-page answering brief in the ISO's massive tariff case at the FERC, addressing scores of the hundreds of so-called "unresolved issues" that have been left pending since the ISO submitted a proposed clarification amendment to its tariff in July 1998.
<p>The brief deals with at least 15 separate categories of issues, and each category in turn can contain a dozen or more discrete issues: (1) ancillary services, (2) voltage support, (3) ISO dispatch authority, (4) the inter-zonal congestion management regime, (5) recognition of pre-existing contract rights for transmission services, (6) market monitoring, (7) metering, (8) metered subsystems, (9) outages, (10) portfolio bidding, (11) the ISO's relationship with the Power Exchange, (12) scheduling coordinators, (13) settlements, (14) transmission pricing and losses, and (15) the ISO's transmission control agreement. </p>
<p>Issue No. 298, regarding congestion management, is typical: "Is the 3000-bus model adopted by the ISO for prices and decisions on inter-zonal access anticompetitive, unjust or unreasonable, or should the ISO adopt a simplified commercial 15-bus model, which treats all resources within a zone identically on a zonal basis?" </p>
<p>And the question of pre-existing contract rights was made more complicated on March 24, when the Western Power Trading Forum filed a complaint against the ISO , charging that the ISO's grid management charge is excessive and anticompetitive, due in part, says WPTF, "to the subsidy that the ISO affords holders of existing contracts." </p>
<p>But the ISO downplays the complexity, saying that "The actual number of issues truly in dispute in this proceeding is smaller [than 100] because in some instances the issues have been resolved." </p>
<p><b>NY ISO Prices.</b> Just three days after Niagara Mohawk filed a complaint alleging collusive conduct in New York's market for generation reserves, the New York Independent System Operator asked the FERC for authority to suspend market-based bids for 10-minute nonsynchronized reserves (NSRs), citing its own evidence of market distortions. </p>
<p>The ISO request notes that market shares for NSR capacity in New York are highly concentrated and suggests that beginning Jan. 29, producers withheld NSR capacity from markets, driving NSR prices above prices for spinning reserves, which should not ordinarily occur, since spinning reserve denotes a higher quality of resource. FERC Docket ER00-1969-000, March 27, 2000. </p>
<p><b>MAPP + MAIN.</b> Representatives at MAPP (Mid-Continent Area Power Pool) and MAIN (Mid- America Interconnected Network) signed a memorandum of understanding to merge the reliability functions of the two organizations - just a month after MAPP's corporate contractor (MAPPCOR) concluded agreements to combine with the Midwest Independent System Operator. </p>
<p>The newly merged MAPP/MAIN regional reliability organization (RRO) would be organized to match structures envisioned in legislation proposed to restructure the North American Electric Reliability Council (NERC) as an "organization" (i.e., "NAERO"). </p>
<p><b>Source &amp; Sink Tagging. </b>The electric industry is up in arms over Entergy's proposed "Attachment M" - an amendment to its transmission tariff that would require all customers to supply valid source and sink data for each grid transaction. </p>
<p>Entergy's proposal also would bar transmission customers from designating fictitious source and sink data, which occurs when customers string together two or more segmented power movements to achieve a complete transaction, a technique that allows transmission customers to hide the identities of energy buyers and sellers. </p>
<p>In their joint protest (one of many), Enron Power Marketing and ELCON (the Electricity Consumers Resource Council) argued that the North American Electric Reliability Council as a matter of policy has rejected Entergy's idea. Further, Enron and ELCON say that Attachment M would impose burdens only on point-to-point transactions and would deny commercial advantages enjoyed by competitors of Entergy and transmission-dependent utilities that operate within a load-only or a generation-only control area. </p>
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<h3>Studies &amp; Reports</h3>
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<p><b>FERC's Self Review. </b>In a report issued in March, "State of the Markets 2000," the FERC admitted that it needs better methods to evaluate market power in utility merger cases, and called for more performance measurement tools that can define the extent and quality of customer access to commodity and transportation markets. </p>
<p>At the same time, the commission released its annual performance report for fiscal year 1999 - the first one required under the Government Performance and Results Act. </p>
<p>Taken together, the two reports offer insights and admissions by the FERC of new realities in markets and policy: (1) it is locational differences in gas commodity prices, and not costs, that should drive prices for pipeline transportation; (2) gas price spikes seen in the winter of 1995-1996 most likely were caused by the inexperience of marketers and traders, rather than any policy defect; and (3) the commission has not yet figured out how to balance environmental concerns with other needs in gas pipeline certification cases. </p>
<p><b>Plant Construction. </b>A report released March 13 by the staff of the California Energy Commission concluded that if eleven large power plants were put into service in the state between 2001 and 2003, available generation would take care of load growth for much of the decade. </p>
<p>But the report also suggested that wholesale electric prices would fall short of revenues needed to support the new plants - whether or not construction was spread out as far into the future as 2008. </p>
<p>Since over 40 plants are currently proposed for construction in California, with at least 19 serious candidates for completion, the study suggests that developers will need other alternative income sources, higher market prices, or lower plant costs than assumed under staff's analysis. </p>
<p><b>Fuel Mix.</b> A study conducted by the Electric Power Research Institute found that under the "current policy," if future restrictions on carbon dioxide, nitrogen oxides, and sulfur dioxide are put into place, electricity derived from coal would decline from over 50 percent today to less than 10 percent by 2020. </p>
<p>Over the same period, said EPRI, natural gas generation would increase from 15 percent to about 60 percent, requiring $160 billion in new investment in gas-fired generation to meet domestic needs. </p>
<p>"Our study revealed that even if this initial shift from coal to gas could be accomplished, reliance on natural gas for electricity generation could not be maintained at such a high level for an extended period of time," said Dr. Gordon Hester, EPRI manager for the study, "Energy-Environment Policy Integration and Coordination." </p>
<p><b>Appliance Efficiency Standards.</b> Swift adoption of appliance efficiency standards would reduce dramatically the nation's energy demand, saving consumers $14 billion a year by 2020, according to a new report by the Appliance Standards Awareness Project. </p>
<p>According to ASAP, the standards it has recommended to the U.S. Department of Energy would eliminate the need for 64 large power plants by 2010, and 180 plants by 2020, while cutting 31 million metric tons of carbon pollution each year, including 90,000 metric tons of nitrogen oxide and 350,000 metric tons of sulfur dioxide. </p>
<table width="100%" border="0">
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<td>
<h3>Business Wire</h3>
</td>
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</table>
<p><b>AllConnect.com</b>, which assists customers in selecting and connecting their utility and communications services, has been selected as the exclusive integrated content supplier of these consumer services for movecentral.com, a Boston-based provider of on- and offline move-related services to customers of its corporate clients. The agreement will allow visitors to the <b>movecentral.com</b> site to tap into all of the services offered by AllConnect.com, whose free service identifies available service plans from name-brand providers, helps the consumer select the right plans, and then processes the orders. </p>
<p><b>Southern Co. Energy Marketing</b> and <b>Utility.com</b> have entered into a partnership to provide Southern's wholesale electricity to Utility.com's customers via the Internet, making Southern the preferred wholesale electricity provider to the Internet utility company. Southern Co. Energy Marketing also has taken an equity stake in Utility.com, with the right to make an additional investment in subsequent private financings. </p>
<p><b>TXU</b> has reached an agreement to sell its majority interest in a Mexico City gas distribution system to <b>Gas Natural</b> and <b>Hidroelectrica del Cantabrico</b> for $68 million. The agreement is expected to close later this year, subject to regulatory approval. Gas Natural will become operator when the transaction is completed. "Mexico City is a growing, vibrant market. However, the operation in Mexico City is not consistent with our overall corporate strategy," said Brian Dickie, TXU Emerging Businesses Group president. </p>
<p><b>Atlantic Renewable Energy Corp</b>., in combination with <b>International Wind Corp.</b> and <b>Citizens for Pennsylvania's Future</b>, have announced a green power offering from the Mill Run wind project located in Fayette County, Pa. Mill Run Windpower LLC has issued a request for proposals to entities interested in submitting bids to purchase green power, green certificates, and/or emission reduction credits that will be generated by the 15.6-megawatt Mill Run project.</p>
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<h3>Internet Commerce</h3>
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<p><b>Utility Collaborations. </b>In late March a consortium of 15 leading U.S. electric and gas companies announced plans to launch an Internet market for procurement of energy industry goods, services, and supplies. PricewaterhouseCoopers will assist with development and technology selection for the group, which includes American Electric Power, Cinergy, Duke Energy, Edison International, Entergy, FirstEnergy, FPL, PG&amp;E Corp., Public Service Enterprise Group, Reliant, Sempra, Southern Co., TXU, and Unicom. </p>
<p>Two weeks later, on April 13, a six-member consortium of energy utilities (AEP, Duke, El Paso, Reliant) and affiliated marketers (Aquila, Southern Energy Marketing) said they would follow with an Internet-based platform for trading energy, both business-to-business and over the counter. </p>
<p><b>Antitrust Oversight.</b> On April 7, the Federal Trade Commission issued new antitrust guidelines to help the agency evaluate collaborations among competitors, including joint ventures and strategic alliances. The guidelines will apply to buying collaborations, whereby participants centralize the process of ordering or procurement, which the FTC said may "facilitate collusion by standardizing [the] participants' costs or enhancing the ability to project or monitor a participant's output level through knowledge of its input purchases." <a href="http://www.ftc.gov/opa/2000/04/collguidelines.htm">www.ftc.gov/opa/2000/04/collguidelines.htm</a>. </p>
<p>On June 6-7, the FTC will hold a public workshop on alternative dispute resolution for consumer transactions in the "borderless online marketplace." 65 Fed. Reg. 18032, April 6, 2000.</p>
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<h3>State Legislatures</h3>
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</table>
<p><b>Electric Restructuring. </b>October 2002 would be the start date for electric retail choice in Iowa under restructuring legislation introduced by the House Commerce and Regulation Committee. The legislature had until mid-April, when the session ended, to work on the bill, tagged House File 2530. An amendment requiring that 8 percent of the state's power come from renewable sources by 2011, initiated by Gov. Thomas Vilsack, was defeated in committee. </p>
</p>
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Mon, 15 May 2000 04:00:00 +0000puradmin10669 at https://www.fortnightly.comNews Digesthttps://www.fortnightly.com/fortnightly/2000/04-0/news-digest
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>&lt;b&gt;State PUCs&lt;/b&gt;</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Docket No. NOI-98-3, March 3, 2000 (Iowa Ut.Bd.)</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - April 15 2000</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><blockquote><p><center> </center> <br />
<h3 align="left"><b>State PUCs</b></h3>
<p align="left"></p>
<p align="left"><b>Natural Gas Competition</b>. After reviewing a report prepared by its staff, the Iowa board rejected all plans filed by Iowa natural gas utilities to open the natural gas market to small-volume customers. </p>
<p align="left">"[S]ome of the utilities' plans do not proceed quickly enough and others proceed too quickly by having the regulated utility exit the merchant function," the board said. </p>
<p align="left">The board, while recognizing that some issues might require legislation to resolve, attempted to "move this process forward" by requiring each utility to propose tariff changes that remove barriers to competition in the small-volume sector. Comments addressing the procedural steps for designing the initial tariffs were due April 3. </p>
<p align="left">Board member Susan J. Frye agreed with the rejection of the utilities' plans, but dissented on the commission's attempt at moving forward on the issue without the help of lawmakers. "[L]egislation is a better way to open the small-volume gas market to customer choice than the interim tariff modification approach adopted in this order," she said. . </p>
<p align="left"><b>Demand-side Management.</b> The Kentucky PSC approved a three-year extension of pilot programs for demand-side management administered by Kentucky Power Co., but has encouraged the utility to seek ways to improve the cost-effectiveness of weatherization programs designed to assist its low-income customers. . </p>
<p align="left"><b>Administrative Rules</b>. Interested parties must notify the Iowa board by May 1 if they wish to participate in a comprehensive review of commission rules, as ordered by Gov. Vilsack for all state agencies. However, the board acknowledged that if an electric restructuring bill passes, the review plan would have to be completely revised because restructuring rulemakings may have to be combined with the review. A final report is to be submitted to the governor's office on Dec. 31, 2002. . </p>
<p align="left"><b>PG&amp;E Rates.</b> In a highly contentious rate case, producing a decision longer than 500 pages, the California PUC on Feb.17 granted Pacific Gas &amp; Electric Co. a 13 percent increase ($91 million) in revenues for natural gas distribution service (PG&amp;E had asked for $377 million), plus an 18.9 percent increase ($361 million) in revenues for electric distribution service (versus a $648 million request). </p>
<p align="left">The net impact on electric revenues will be smaller, however (up only $120 million net) because the increase will be offset by the expiration of $241 million in legislatively mandated electric revenues for reliability related activities. </p>
<p align="left">Furthermore, consumer electric rates are not immediately affected by the authorized increases because of the general rate freeze mandated by state law and the 10 percent mandated rate cut for residential and small commercial customers currently in effect under Assembly Bill 1890. On the gas side, the PUC estimated that residential bills would rise $1.56 for a customer using an average of 50 therms per month. </p>
<p align="left">The ruling reflects the authorized cost of capital for 1999 set in Decision 99-06-057, issued last June. . </p>
<p align="left"><b>Rights-of-Way.</b> The Maine PUC OK'd a plan by Central Maine Power Co., an electric utility, to transfer right-of-way easements to, and to share electric corridors with, affiliated natural gas pipeline company, CMP Natural Gas LLC. The arrangement will allow the gas company to construct a pipeline to serve Calpine Corp.'s now-under construction, 540-MW gas-fired power plant. . </p>
<p align="left"><b>Fuel Procurement.</b> The Iowa board initiated a rulemaking to replace the board's annual evaluation of electric utility contracting practices and fuel procurement. Under the proposal, it would notify utilities each year by Jan. 31 on whether they must file a fuel procurement plan, which would be due by May 15. Comments were due March 28. . </p>
<p align="left"><b>Gas Retail Choice.</b> The Florida PSC adopted a rule allowing small businesses to choose their natural gas supplier (an option previously available only to large industrial consumers), and also allowing gas utilities (at their discretion) to offer choice to residential customers. </p>
<p align="left">The rule directs all investor-owned gas utilities to offer transportation service to all nonresidential customers and eliminates volume thresholds ranging from 100,000 to 500,000 therms per year that had governed customer eligibility. </p>
<p align="left">The PSC established base line requirements for each utility's open access tariff, but imposed minimal requirements so that each utility can tailor its tariff to its individual needs. Each tariff must clearly specify that the utility providing transportation service is not responsible for providing the customers with natural gas if the customer's supplier fails to produce. . </p>
<p align="left"><b>Performance-Based Rates.</b> Kentucky Utilities and LG&amp;E have agreed to implement an earnings shared mechanism (ESM) suggested in January by the Kentucky PSC allowing the utilities to keep 100 percent of their earnings up to 12.5 percent return on equity, with any earnings above that ROE shared with shareholders (60 percent) and ratepayers (40 percent). If company profits go below a 10.5 percent ROE, customer rates would increase to account for 40 percent of the loss. </p>
<p align="left">In response to the orders, which impose a $63 million annual revenue reduction ($36.4 million for KU and $27.2 million for LG&amp;E) representing more than 20 percent of the utilities' combined income, Duff &amp; Phelps Credit Ratings Co. has downgraded the credit ratings of both utilities and imposed a negative rating outlook. </p>
<p align="left"><b>Stranded Costs.</b> The Texas PUC tentatively approved a settlement allowing Central and South West Corp.'s subsidiary, Central Power &amp; Light Co., to securitize about $764 million in stranded costs, short of the $1.27 billion CPL had requested in October 1999. </p>
<p align="left">The settlement calls for the securitized amount to be reduced to $764 million in regulatory assets plus other qualified costs estimated at $28 million, and for $290 million of the regulatory assets originally requested to be securitized to be included in the calculation of stranded costs in CPL's April 2000 transmission and distribution cost filing. The PUC would issue a final determination on stranded costs in 2004.. </p>
<p align="left"><b>Utility Marketing Affiliates.</b> The Kentucky PSC adopted a code of conduct to govern sharing of information and resources between investor-owned utilities and their unregulated affiliates. . </p>
<p align="left"><b>LDC-Marketer Relationship. </b>The Michigan PSC adopted a set of standards to regulate dealings between Michigan Gas Utilities (a regulated gas utility) and marketers, whether or not affiliated, but rejected a proposal to require the utility to conduct all unregulated marketing activities through a separate corporation. . </p>
<p align="left"><b>QF Purchase Obligation.</b> Citing a new hydro project as too unreliable in its energy output, the Alaska PSC said it would not require the local utility to purchase project power at avoided cost rates, though the hydro project qualified as a small power production facility (QF) under the Public Utility Regulatory Policies Act of 1978. </p>
<p align="left">The case involved South Fork Hydro LLC (the QF) and Matanuska Electric Assoc. Inc.. </p>
<p align="left"><b>Gas Unbundling</b>. Massachusetts OK'd a model tariff for the state's unbundling program for consumer choice in natural gas, which was to begin on April 1. </p>
<p align="left">Nevertheless, it warned that the new tariffs could lead to "unacceptable cost-shifting" as the result of deaveraging of LDC-system capacity costs, and that company-specific review of capacity allocators for each class of customers will be reviewed as each utility completes its compliance filings in the case.. </p>
<p align="left"><b>Electric Customer Choice</b>. The Vermont board opened an initiative to consider how to implement retail access policies for Central Vermont Public Service Corp. (CVPS) and Green Mountain Power Corp. (GMP), slated for startup in Sept. 2001 on a voluntary basis. . </p>
<h3 align="left">Mergers &amp; Acquisitions</h3>
<p align="left"><b>AEP + C&amp;SW. </b>The FERC approved the merger of American Electric Power Co. and Central &amp; South West Corp., but only upon condition that the two halves of the merged company (AEP East and AEP West) will transfer operational control of their transmission facilities to a fully functioning, commission-approved regional transmission organization (RTO) by Dec. 15, 2001, the date specified in the final rule (FERC Order 2000) for RTO formation. </p>
<p align="left">The FERC reversed an initial decision issued last year by an administrative law judge that had found few problems with the deal. Instead, the FERC said the merger would enhance the potential for market power and thus impose an adverse effect on competition absent the required condition for RTO formation. </p>
<p align="left">The commission was satisfied by plans for the merger applicants to divest about 500 MW of generation in certain key markets, but saw competitive problems even if the deal would not increase market share in generation. It rejected arguments by the merger applicants that, in highlighting the mere enhancement of market power as significant, it was improperly considering pre-merger market power.. </p>
<p align="left">Commissioner Curt Hébert dissented, saying the majority's theory wrongly treated the merger as a vertical combination. He noted that just two weeks prior to the commission's order, the International Competition Advisory Committee at the U.S. Dept. of Justice had recommended ending the FERC's role in looking at antitrust issues in the merger context. </p>
<p align="left">"Our claimed expertise leads today's majority to invent market power out of thin air," said Hébert."Congress should remove us from the merger business." </p>
<p align="left"><b>NEES + Eastern Utilities.</b> The U.S. Nuclear Regulatory Commission approved the merger between New England Electric System and Eastern Utilities Associates, according to NEES president and chief executive officer Rick Sergel. The merger still requires approval by the federal Securities and Exchange Commission, as well as Massachusetts and Rhode Island regulators. "We continue our progress toward completing this merger early this year," Sergel said. </p>
<p align="left"><b>LG&amp;E + PowerGen</b>. PowerGen plc would acquire LG&amp;E Energy Corp. at $24.85 per share in cash under a definitive agreement signed in February between the two companies, marking the first entry by PowerGen into the U.S. market. The deal was valued at $3.2 billion. The cash offer would represent a 9.8 percent premium over LG&amp;E's $22.63 closing share price on March 16, the same day the parties said they had filed a joint merger application with the Kentucky Public Service Commission. </p>
<p align="left">LG&amp;E CEO Roger W. Hale appeared confident of approval, noting that on March 15, the U.S. Securities and Exchange Commission had OK'd the merger between the UK's National Grid Group plc and New England Electric System. </p>
<p align="left">"The SEC's approval of foreign ownership of a U.S. utility company clearly helps," said Hale. "Our transaction is very similar to [that] deal." </p>
<p align="left"><b>NiSource + Columbia Gas</b>. NiSource said on Feb. 28 it had reached a definitive agreement to acquire Columbia Energy Group in a stock deal valued at approximately $6 billion. Columbia shareholders would receive $70 in cash for each Columbia share, plus a $2.60 face value SAILS (a unit consisting of a zero coupon debt security with a forward equity contract). On completion of the deal, the two companies would become subsidiaries of a new holding company. </p>
<h3 align="left">State Legislatures</h3>
<p align="left"><b>Hydro Divestiture</b>. California Assembly Speaker Fred Keeley introduced a bill on Feb. 22 that would allow the state temporarily to purchase the assets of Pacific Gas and Electric Co. so as to remove them from FERC jurisdiction and allow California to impose environmental and financial restrictions. The measure (Assembly Bill 1956) would allow the state's Consumers Energy &amp; Environmental Security Authority to buy the assets, with the backing of Gov. Gray Davis. </p>
<p align="left">PG&amp;E currently has a proposal before the California PUC to divest its hydroelectric generating plants in a competitive auction. In a Jan. 18 letter to Gordon R. Smith, president and CEO of PG&amp;E, Keeley argued that an immediate sale by PG&amp;E to the state would provide the "mandate, time, and money to address the environmental, ratepayer/market power, and other important issues of divestiture at no expense to the taxpayer, ratepayer, or shareholder." </p>
<p align="left"><b>Electric Restructuring</b>. The West Virginia House was considering HCR 27, which would restructure the state's electric industry to allow choice of electric supplier. The West Virginia PSC recently presented a restructuring plan to the legislature, finding choice is needed to ensure West Virginia's future economic viability. </p>
<h3 align="left">Power Plants</h3>
<p align="left"><b>Allocating Sale Proceeds.</b> The Washington commission ruled that ratepayers should receive the excess in proceeds above net book value (up to original cost) on the sale of utility-owned generating plants, and 50 percent of any appreciation above original cost, in a decision that OK'd the sale of interests held by the state's three private electric companies (PacifiCorp, Avista Corp., and Puget Sound Energy) in the 1,340-megawatt Centralia power plant to TransAlta Corp. of Calgary, Alberta. </p>
<p align="left">It added that it would factor in such payments in pending and future rate cases for the three utilities. </p>
<p align="left">Commissioner Richard Hemstad dissented, saying that customers should receive any and all appreciation in plant values "to compensate them for risks they have borne while the facilities were in rate base." </p>
<p align="left"><b>Auction Participants</b>. The New York PSC OK'd Central Hudson Gas &amp; Electric Corp.'s auction plan for the sale of its Danskammer fossil generation facility and its 35 percent interest in the Roseton fossil generation facilities, after accepting the utility's offer to exclude its unregulated affiliate from the auction. </p>
<p align="left">The PSC directed Central Hudson to use the Federal Energy Regulatory Commission's market power guidelines "for selecting bidders that can survive market power scrutiny," and required the company to be able to certify to the commission that the winning bidder meets the horizontal market power guidelines set out in previous auctions. </p>
<p align="left">The PSC noted that the auction plan largely resembles "the process that has been successfully deployed in other auctions," citing the Niagara Mohawk auction order Case 96-E-0-891, April 24, 1998 (N.Y.P.S.C.). </p>
<p align="left"><b>Hydro Relicensing</b>. Hydroelectric project sponsors won one and lost one in a pair of orders issued by the FERC. </p>
<ul>
<li>
<div align="left"><b> Collaborative Process.</b> The FERC relicensed two hydroelectric projects owned by Avista Corp. on the Clark Fork River, marking the first successful use of an alternative licensing process that shaved two years off the normally three-year process. Over 40 organizations agreed to the granting of the 45-year licenses. </div>
</li>
<li> <b>Fish Ladders</b>. On the same day, the FERC rescinded a license granted to Public Utility District No. 1 of Okanogan County, Wash. for the proposed 4.1-MW Enloe Dam, saying that fish ladders required by the National Marine Fisheries Service (NMFS) of the U.S. Department of Commerce would greatly increase costs when the project already appeared to be uneconomical. The Canadian government also opposed the fish ladder, saying it would introduce nonindigenous fish, creating disease risk. </li>
</ul>
<p><center><br />
<h3 align="left">Studies &amp; Reports</h3>
<p align="left">Changes to billing systems represent the largest back-office expense for utilities and suppliers preparing for competitive energy markets, according to a study from Xenergy Inc., which notes that billing problems in some cases have led to lawsuits or bankruptcies. </p>
<p align="left">The study says utilities report spending anywhere from $1.22 to $22 per customer, with one utility reportedly spending up to $82 million to make billing system changes needed to accommodate retail access. </p>
<p align="left">"Having the right systems in place is critical to the success or failure of competition," said Jill Feblowitz, XENERGY senior consultant and project manager for the study. </p>
<h3 align="left">Transmission &amp; ISOs</h3>
<p align="left"><b>RTO Workshops</b>. Philip J. Pellegrino, CEO of ISO New England, Inc., caused a stir on the first day of the FERC's two-day workshop on regional transmission organizations (RTOs) held March 15-16 in Philadelphia, when he acknowledged that in the "mid-term," or between three and five years out, it was likely that the independent system operators (ISOs) for New York, New England, and PJM would combine to form a single RTO in the Northeastern United States. Pellegrino's acknowledgment drew no protest from William Museler (CEO of the New York ISO) or Richard Wodyka (COO for PJM) when they took the podium later in the day. </p>
<p align="left">Pellegrino added that a binary form of RTO was the "ideal structure" for such a mega-RTO, with an ISO serving as a standard-setting group, and a single for-profit company owning all the transmission assets now owned by individual investor-owned utilities. </p>
<p align="left">"So far it hasn't been fun to be in the transmission business," said Pellegrino. "We need a profit motive. The rat has to smell the cheese." </p>
<p align="left"><b>New England ISO.</b> Reviewing market flaws affecting ISO New England and the New England Power Pool, the FERC granted an extension through June 30 for the temporary price cap for the operating reserve market that had been set to expire on Dec. 31, 1999. Commissioner Curt Hébert dissented. </p>
<p align="left"><b>Transco Formation.</b> The Ohio PUC issued conditional approval of a proposal by FirstEnergy Corp. to transfer transmission assets to a wholly owned subsidiary, American Transmission Services Inc., in what it described as an "intermediate and facilitating" step in the formation of a regional transmission organization, despite objections that formation of a private for-profit transmission company might lead to pancaking of transmission rates and deprive consumers of the benefits of electric competition. </p>
<p align="left">The PUC conditioned approval on its later determination that the assets to be transferred will qualify as "transmission" under the FERC's seven-factor test for distinguishing transmission from distribution assets. </p>
<p align="left">A second condition would require ATS to "fully succeed" to FirstEnergy's native load obligations.. </p>
<p align="left"><b>Native Load Reservations.</b> In granting a complaint by Aquila Power Corp., the FERC ruled that Entergy violated the commission's pro forma transmission tariff and the comparability requirements of Order 888 by failing to designate the network resources (generation) associated with its reservations for firm transmission import capacity. </p>
<p align="left">Entergy had said it wanted only to serve native load reliably, but the FERC observed that Entergy had reserved virtually all of the firm capacity on four key interfaces, and was essentially using its reservations to keep capacity open to buy off-system power whenever it might prove economical to do so. </p>
<p align="left"><b>Mountain West ISA</b>. The Nevada PUC has refused to issue a guarantee to Nevada Power Co. and Sierra Pacific Power that they can recover losses from ratepayers if the Mountain West Independent System Administrator should default on funding loans from the utilities, but at the same time the PUC ruled that the parties had complied with all requirements for ISA formation that the PUC set earlier as a condition for their proposed merger, so that from a legal standpoint, the PUC had nothing left to do. </p>
<p align="left">The PUC acknowledged the paradox: "The MWISA cannot function without startup funds. However, the funding proposal ... requires a guarantee [that] would constitute an irresponsible risk of consumer funds." </p>
<p align="left">The PUC added that when it required ISA formation earlier as a condition for the merger, it had set no test or conditions for funding. Thus, the PUC ruled it had "no basis for review" of any proposed funding mechanism, and thus no grounds to act further. To move the process forward, the PUC said it would first have to rule that a specific funding mechanism for the ISA was required for the economic and reliable operation of transmission facilities. </p>
<p align="left">Meanwhile, the PUC noted that the MWISA so far had been conducting management activities through an interim stakeholder board and needed to hurry up and form an independent board to legitimize the governing process. Earlier, the MWISA's stakeholder board had selected Automated Power Exchange to provide software support, but the PUC questioned that move when it declared: "The decision as to the selection of a vendor should be left until the independent board is in place." </p>
<p align="left">The Fortnightly questioned Rosalie Day, chairman of the current interim stakeholder board, on how the ISA could form a new board, satisfy tests of independent governance, and conduct another solicitation for a software vendor and operator - all without funding. </p>
<p align="left">She answered, "Has the train left the station without an engineer? Heck, it doesn't even have tracks." </p>
<h3 align="left">Courts</h3>
<p align="left"><b>APX Oversight.</b> Noting the "broad language," Congress used in the Federal Power Act, a federal appeals court upheld a ruling by the Federal Energy Regulatory Commission that had claimed jurisdiction to regulate the Automated Power Exchange as a public utility under the Federal Power Act. APX, which had argued that it wasn't a public utility because it will not transmit or take title to power, instead called itself an "information management agent." </p>
<p align="left">The court agreed with the FERC that the software used by APX played a role in markets by assigning a price to bilateral transactions where a gap might still exist between the bid and offer prices submitted by transacting parties. </p>
<p align="left">After the ruling was issued, APX announced that its latest software and product design would not incorporate this feature of automatically setting a price (where a buyer and seller had not yet agreed) for private power exchanges planned in Illinois (working with Commonwealth Edison) and Ohio (working with FirstEnergy). </p>
<p align="left"><b>NOx Emissions.</b> A federal appeals court rejected a claim that the Environmental Protection Agency has not explained adequately what volume of nitrogen oxide emissions flowing from one state to another contributes "significantly" to NOx nonattainment under Section 110 of the Clean Air Act. </p>
<p align="left">The appeal was based on last May's decision in , which ruled that the EPA had interpreted the Clean Air Act so loosely that the power delegated to it by Congress was unconstitutional. Yet the court sought to limit the consequences of that ruling. </p>
<p align="left">The court noted that "a mass of cases" had upheld delegations of "effectively standardless discretion," even where the scope of agency power was narrow. </p>
<p align="left">It said the EPA need only do three things to show a significant contribution to nonattainment: (1) identify emissions activity within a state, (2) show evidence that emissions migrate to another state, and (3) show that the emissions contribute to nonattainment. </p>
<p align="left"><b>QF Certification.</b> A federal appeals court affirmed a ruling by the Federal Energy Regulatory Commission that had upheld certification for a qualifying cogeneration facility (QF) even though the QF's corporate voting rules allowed electric utility affiliates (controlling a 45 percent ownership interest) to block significant corporate action, a feature that had led to complaints alleging a violation of QF rules regarding utility ownership. . </p>
<h3 align="left">Business Wire</h3>
<p align="left"><b>DTE Energy Technologies</b>, an unregulated subsidiary of <b>DTE Energy Co.</b>, has reached a distribution agreement with <b>GENERAC Power Systems</b>, a manufacturer of prepackaged standby power systems for homes and small businesses, for DTE to market the Generac GUARDIAN product, which provides fully automated standby power systems for homes and small businesses in Southeastern Michigan. DTE also will market custom-designed engineered systems for larger commercial and industrial customers. "The addition of the Generac product line to our portfolio represents a key step toward attaining our vision of DTE Energy Technologies as a preeminent supplier of distributed generation products and services," said Paul Horst, president of DTE Energy Technologies. </p>
<p align="left"><b>Consumers Energy and Chubu Electric Power Co.</b> of Nagoya, Japan have signed what is believed to be the first-ever agreement to form a purchasing alliance between an American and Japanese utility company. The agreement supports an objective of the Japanese and U.S. governments to promote increased exports of U.S.-made utility equipment to Japan. The goals of the agreement are to examine product cost, productivity standardization, new product development, electronic technology, resource and knowledge sharing, and procurement process improvement and streamlining. </p>
<p align="left"><b>United Energy </b>of Australia has signed a multi-year, multi-million dollar contract with <b>CES International</b>, a provider of real-time infrastructure reliability solutions, for the deployment of its Centricity operations resource management suite of solutions. With the agreement, CES becomes United Energy Distribution's prime contractor, systems integrator, and project management services provider for its electric and gas distribution management systems project. </p>
<h3 align="left">Public Power</h3>
<p align="left"><b>Las Cruces-El Paso Elec. Dispute</b>. A settlement that would end the long-running dispute between the City of Las Cruces and El Paso Electric Co. over municipalization of EPE's electric distribution system in the city would give EPE a seven-year franchise to serve the city. </p>
<p align="left">EPE would pay the city an annual 2 percent franchise fee (about $800,000/ year) and a lump sum of $21 million, and after seven years, Las Cruces would be able to buy EPE's distribution system for book value plus 30 percent. </p>
<h3 align="left">Congress</h3>
<p align="left"><b>Reliability &amp; Restructuring</b>. Without calling it an electric restructuring bill, Senate Energy and Natural Resources Committee Chairman Frank Murkowski (R-Alaska) on Feb. 24 introduced legislation that would repeal the Public Utility Holding Company Act of 1935 and the mandatory purchase requirement in Public Utility Regulatory Policies Act of 1978, in addition to allowing for stranded cost recovery. </p>
<p align="left">The measure, Senate Bill 2098, addresses reliability by calling for eminent domain to construct new interstate transmission lines, and for the North American Electric Reliability Council to file with the Federal Energy Regulatory Commission proposed reliability standards, over which the commission would have approval authority. Cosponsored by Sen. Mary Landrieu (D-La.), the bill also allows for FERC oversight of regional transmission organizations. See <a href="http://thomas.loc.gov/cgi-bin/query/z?c106:S.2098:">http://thomas.loc.gov/cgi-bin/query/z?c106:S.2098:</a>. </p>
<h3 align="left">Electric Rates</h3>
<p align="left"><b>Oregon Electric Rates.</b> Finding the request inconsistent with a previous rate-setting agreement, the Oregon PUC rejected a request by PacifiCorp for a 12.6 percent residential rate hike, and told the company it must correct the deficiencies and extend the period of investigation of its filing by two months or the request would be dismissed. </p>
<p align="left">PacifiCorp had argued that the filing was sufficient because it assigned the same 30 percent to distribution and 70 percent to generation and transmission as was used in the previous agreement. But PUC Chairman Ron Eachus pointed out, "Our previous agreement applied to the distribution function, not to a specified percentage of revenues. If the company wants an increase for generation and transmission, it has to break those costs and revenues out separately." </p>
<p align="left"></p>
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<a href="/tags/aep">AEP</a><span class="pur_comma">, </span><a href="/tags/american-electric-power">American Electric Power</a><span class="pur_comma">, </span><a href="/tags/american-transmission">American Transmission</a><span class="pur_comma">, </span><a href="/tags/avista">Avista</a><span class="pur_comma">, </span><a href="/tags/calpine">Calpine</a><span class="pur_comma">, </span><a href="/tags/central-hudson-gas-electric">Central Hudson Gas &amp; Electric</a><span class="pur_comma">, </span><a href="/tags/central-maine-power">Central Maine Power</a><span class="pur_comma">, </span><a href="/tags/central-vermont-public-service">Central Vermont Public Service</a><span class="pur_comma">, </span><a href="/tags/ces">CES</a><span class="pur_comma">, </span><a href="/tags/citi">Citi</a><span class="pur_comma">, </span><a href="/tags/clean-air-act">Clean Air Act</a><span class="pur_comma">, </span><a href="/tags/cmp">CMP</a><span class="pur_comma">, </span><a href="/tags/commission">Commission</a><span class="pur_comma">, </span><a href="/tags/congress">Congress</a><span class="pur_comma">, </span><a href="/tags/consumers-energy">Consumers Energy</a><span class="pur_comma">, </span><a href="/tags/cost">Cost</a><span class="pur_comma">, </span><a href="/tags/cvps">CVPS</a><span class="pur_comma">, </span><a href="/tags/dc">DC</a><span class="pur_comma">, </span><a href="/tags/demand-side">Demand-side</a><span class="pur_comma">, </span><a href="/tags/distribution">Distribution</a><span class="pur_comma">, </span><a href="/tags/dte-energy">DTE Energy</a><span class="pur_comma">, </span><a href="/tags/el-paso-electric">El Paso Electric</a><span class="pur_comma">, </span><a href="/tags/energy-and-natural-resources-committee">Energy and Natural Resources Committee</a><span class="pur_comma">, </span><a href="/tags/entergy">Entergy</a><span class="pur_comma">, </span><a href="/tags/epa">EPA</a><span class="pur_comma">, </span><a href="/tags/epe">EPE</a><span class="pur_comma">, </span><a href="/tags/federal-energy-regulatory-commission">Federal Energy Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/federal-power-act">Federal Power Act</a><span class="pur_comma">, </span><a href="/tags/ferc">FERC</a><span class="pur_comma">, </span><a href="/tags/firstenergy">FirstEnergy</a><span class="pur_comma">, </span><a href="/tags/florida-psc">Florida PSC</a><span class="pur_comma">, </span><a href="/tags/ge">GE</a><span class="pur_comma">, </span><a href="/tags/green-mountain-power">Green Mountain Power</a><span class="pur_comma">, </span><a href="/tags/hydro">Hydro</a><span class="pur_comma">, </span><a href="/tags/hydroelectric">Hydroelectric</a><span class="pur_comma">, </span><a href="/tags/iso">ISO</a><span class="pur_comma">, </span><a href="/tags/iso-new-england">ISO New England</a><span class="pur_comma">, </span><a href="/tags/kentucky-psc">Kentucky PSC</a><span class="pur_comma">, </span><a href="/tags/lge">LG&amp;E</a><span class="pur_comma">, </span><a href="/tags/maine-puc">Maine PUC</a><span class="pur_comma">, </span><a href="/tags/national-grid">National Grid</a><span class="pur_comma">, </span><a href="/tags/nee">NEE</a><span class="pur_comma">, </span><a href="/tags/nera">NERA</a><span class="pur_comma">, </span><a href="/tags/new-england-electric-system">New England Electric System</a><span class="pur_comma">, </span><a href="/tags/new-york-psc">New York PSC</a><span class="pur_comma">, </span><a href="/tags/nisource">NiSource</a><span class="pur_comma">, </span><a href="/tags/nuclear">Nuclear</a><span class="pur_comma">, </span><a href="/tags/nuclear-regulatory-commission">Nuclear Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/order-888">Order 888</a><span class="pur_comma">, </span><a href="/tags/pacific-gas-electric">Pacific Gas &amp; 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Sat, 15 Apr 2000 04:00:00 +0000puradmin10653 at https://www.fortnightly.comOff Peakhttps://www.fortnightly.com/fortnightly/2000/03-0/peak
<div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - March 15 2000</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>As energy suppliers gather more detail about customers, opportunities for segmenting and selling them will increase during the next five years. </p>
</p>
<p><b>As technology such as AMR and improved </b>information-gathering systems enhance customer data, energy service providers will be well-positioned to segment load profiles into valuable blocks for sale. According to PHB Hagler Bailly's "Energy Industry Outlook 2000," this bottom-line-enhancing possibility will contribute to the changing customer-energy supplier relationship during the next five years. </p>
<p>"If you make the assumption that there will be big blocks of customers who are likely to stay with the incumbent company, then those become a very nice package or bundle to buy, sell, do things with," explains Dr. Roger Gale, president and CEO of PHB Hagler Bailly.</p>
<p>Whether or not customers switch energy suppliers, Gale says, the way they interact with the ESP will certainly change as AMR, bill payment via the Internet and other changes are implemented.</p>
<p>"Put all that together and you have an extraordinarily different world," says Gale. "That's where I think the customer relationship will change. ¼ That's the only relationship the customer has with the utility, pretty much, is writing the check, or calling when the lights go out. That relationship won't be there."</p>
<p>Some ESPs may choose to sell blocks of customers to other energy suppliers. Gale says that's already being attempted. Customers continue to pay their bills to the same ESP they had previously, but another energy company generates the electricity.</p>
<p>"[The first ESP maintains] the risk of providing the service - the wires have to still be there - but they've passed on the energy commodity risk to somebody else," he explains.</p>
<p>So which ESPs stand to benefit most from such an arrangement?</p>
<p>"That depends on who calculates best, like everything else," says Gale. "If you take on that responsibility and you price it wrong, you're dead. If the utility that gets rid of the responsibility realizes there's no way they could ever price it right and make money, then they're the winner."</p>
<p>New England Electric System has seen varying success with two programs it developed to sell customer data to other ESPs while also improving service for customers.</p>
<p>Power Connection has been in place for about a year for customers in Massachusetts. Through the program, commercial and industrial customers may choose to have their usage data provided to ESPs registered in the state. Spokesperson Karen Berardino notes that the arrangement depends on securing authorization from customers, however. About 500 customers have participated.</p>
<p>NEES developed a second program, Info Source, through which the company would provide state-registered ESPs with customer mailing data for a fee. The program was never launched though.</p>
<p>"The reason it didn't get off the ground is that the standard offer [in Massachusetts] is at a price where it doesn't make sense to enter the market and probably won't for a while," says Berardino. The company has no other plans to sell customer data, she adds.</p>
<p>An option that may hold greater promise for ESPs is the sale of customer lists to retail businesses. The market potential could be enormous, says Gale.</p>
<p>"There's so many different customer profiles [into which] you can segment them, a company can sell all kinds of different customer groups," Gale remarks. </p>
<p>Potential markets for such data also appear to be endless, he notes. "Even poor people who can't pay bills - look at the places around that do check-cashing, the liquor stores where you can cash your checks and do your Western Union check transfers - there's somebody who's willing to serve any market." </p>
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<a href="/tags/amr">AMR</a><span class="pur_comma">, </span><a href="/tags/nee">NEE</a><span class="pur_comma">, </span><a href="/tags/new-england-electric-system">New England Electric System</a> </div>
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Wed, 15 Mar 2000 05:00:00 +0000puradmin10637 at https://www.fortnightly.comNews Digesthttps://www.fortnightly.com/fortnightly/2000/03-0/news-digest
<div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - March 15 2000</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>State PUCs </p>
</p>
<p><b>Retail Energy Choice</b>. At press time, Virginia issued proposed interim rules governing pilot programs for electric retail competition in electricity and natural gas, with comments due Feb. 24. The interim rules were not expected to resolve all issues, but only to provide a starting point to gain experience. </p>
<p>Among other points, the interim rules would require utilities to make information available through electronic bulletin boards on availability of commodity supply, ancillary services, and transmission and distribution capacity. Case No. PUE980812, Feb. 10, 2000 (Va. S.C.C.). </p>
<p><b>Discounted Rate Contracts</b>. Even though Ohio will launch retail electric competition on Jan. 1, 2001, the PUC denied a request for rehearing filed by Enron and OK'd certain special customer contracts proposed by Ohio Edison Co. and Cleveland Electric Illuminating. </p>
<p>The PUC said it would wait until reviewing and approving individual utility transition plans to get "a clearer picture" of what to do about such contracts, but said it had not yet precluded any option. Case Nos. 99-389-EL-AEC et al., Feb. 3, 2000 (Ohio P.U.C.). </p>
<p><b>Performance-based Rates</b>. Connecticut regulators set rough guidelines for performance-based rate plans, declining to set uniform standards, as that might overly constrict the future design of PBR plans. However, the new general guidelines do call for company-specific performance measures and collars on return on equity, and envision a plan term of between three and six years. </p>
<p>The PBR guidelines specify such performance measures as SAIDI (System Average Interruption Duration Index) and either SAIFI (System Average Interruption Duration Frequency Index) or CAIDI (Customer Average Interruption Duration Index) as appropriate to track reliability, and emphasize that penalties for reliability erosion should exceed the financial rewards of poor performance.</p>
<p>Peter Navarro, testifying for the state's Office of Consumer Counsel, warned the commission that setting initial baseline rates too high would generate false cost savings. Navarro added that PBR is "easy to do poorly, but difficult to do well." Docket No. 99-06-21, Feb. 2, 2000 (Conn.D.P.U.C). </p>
<p><b>Supplier of Last Resort.</b> The Nevada PUC will conduct a hearing on March 20 to address comments on draft rules proposed on Feb. 7 governing obligations for a supplier of last resort under the state's scheme for retail choice in electricity. Docket No. 97-8001, Feb. 8, 2000 (Nev.P.U.C.). </p>
<p><b>Underground Lines. </b>California opened a rulemaking docket to implement state Assembly Bill 1149, which requires the PUC to consider ways to help convert existing overhead electric and communications lines to underground service. The PUC was to hold its first workshop Feb. 10 and must report back to the legislature by Jan. 1, 2001. R. 00-01-005, Jan. 6, 2000 (Cal.P.U.C.). </p>
<p>A white paper released late last year by the PUC's energy division had reported underground conversion costs as running between $0.5 million and $3 million per mile, but cited other evidence of lower costs (less than $150,000 per mile) developed from experience gained in reconstruction after the Oakland fires of several years back. </p>
<p><b>Distributed Generation</b>. The California PUC was to hold its third workshop on distribution system planning and operations on Feb. 17 to resolve questions posed by administrative law judge Fannie Sid in the formal rulemaking docket on distributed generation issued last October in Decision 99-10-065. See R. 98-12-015 (Cal.P.U.C.). </p>
<p><b>Standard-Offer Bidding</b>. The Maine PUC directed Central Maine Power to enter a one-year wholesale power contract with an anonymous winning bidder to supply power for CMP's medium and large-volume nonresidential electric customers, and set standard-offer prices as well, with peak prices for industrial customers reaching 11.04 cents per kilowatt-hour in summer. </p>
<p>The PUC found that CMP had acted prudently in the bidding process, but noted difficulties nonetheless.</p>
<p>As the PUC observed, "The supplier has all the price risk, yet has absolutely no certainty on the volume to be served. The supplier must hedge against the risk of energy price changes, but receives no certainty that the cost of the hedge will be recovered because there is no certainty of load." Docket No. 99-111, Feb. 11, 2000 (Me.P.U.C.).</p>
<p>Earlier, the PUC had reported that it had solicited bids from generation suppliers that will allow "more than 80 percent of electricity customers in Maine to have access to standard-offer service provided directly by a retail provider," but said that in several instances it was forced to direct utilities to provide standard-offer service themselves on an interim basis. Docket No. 99-111, Feb. 1, 2000 (Me.P.U.C.). </p>
<p><b>Economy Energy Transactions.</b> The Florida PSC opened hearings to consider eliminating the incentive that allows investor-owned utilities to keep 20 percent of gains on economy energy sales for their shareholders. Docket No. 991779-EI, Order No. PSC-00-0195-PCO- EI, Jan. 26, 2000 (Fl.P.S.C.). </p>
<p><b>Electric Retail Choice</b>. To prepare for retail choice in electricity, the Maryland PSC ruled it will not permit utilities to transfer customer lists to competitive suppliers, by sale or otherwise, but will allow disclosure to suppliers "for bill collection and credit rating purposes," to allow competitive suppliers to refuse a service request based on a consumer's poor credit history. </p>
<p>Advertisements must disclose the "precise rate for service" plus other conditions and details - even if the ad contains no means of signing up with a supplier and thus fails to qualify as a solicitation. ("Solicitations" must include additional disclosures and may be answered via telephone or Internet signup.)</p>
<p>To dissuade frequent switching to gain seasonal discounts, the PSC has OK'd "minimum stay" conditions for standard-offer service by utilities, except for Delmarva Power &amp; Light Co. Case No. 8738, Order No. 75949, Feb. 8, 2000 (Md.P.S.C.). </p>
<p><b>Natural Gas Slamming.</b> Anti-slamming rules for natural gas providers approved by the Georgia PSC on Jan. 18 call for a $15,000 fine for each initial slamming offense and $10,000 per day thereafter as the violation continues, if a marketer changes a customer's natural gas provider without proper authorization. Marketers must keep documentation for at least one year detailing the verification process. </p>
<p><b>ISO Costs</b>. New York regulators adopted a memorandum of understanding among New York State Electric &amp; Gas Corp., Niagara Mohawk Power Corp., the New York Power Authority, and other parties providing that the utilities may defer recovery of certain costs imposed by the New York Independent System Operator for delivery of power purchased under various economic development programs in the NYSEG and Ni-Mo service territories. Case 00-E-0073, Jan. 25, 2000 (N.Y.P.S.C.). </p>
<p><b>Billing Errors</b>. Noting that Niagara Mohawk Power Corp. had altered its bill estimation practices without commission approval when it installed a new software system, the New York PSC told the company to justify why it should not pay interest to customers who overpaid by as much as 25 percent when they received faulty bills. </p>
<p>The PSC gave the company 30 days to file a plan to boost the number of actual meter reads and establish new procedures "capable of producing reasonably accurate bills." The PSC asked for a final report by April 30. Case No. 99-M-0742, Jan. 5, 2000 (N.Y.P.S.C.). </p>
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<p><b>Power Markets </b> </p>
<p><b>E-Commerce Regulation.</b> In action that covers not just energy, but all markets, the Federal Trade Commission and U.S. Department of Commerce on Feb. 9 announced a workshop to be held in the spring to explore the use of alternative dispute resolution mechanisms to all consumer transactions "in the borderless online marketplace." </p>
<p>Requests to participate are due March 21. See <a href="http://www.ftc.gov/opa/2000/02/adrrev.htm">www.ftc.gov/opa/2000/02/adrrev.htm</a>. </p>
<p><b>Online Tariffs</b>. New York regulators authorized Central Hudson Gas &amp; Elec. Corp. to dispense with newspaper publication of tariff revisions and convert the company's current tariff into an electronic format with public access via the Internet to all tariffs and tariff changes within 24 hours from date of filing. Case 99-E-1683, Jan. 26, 2000 (N.Y.P.S.C.). </p>
<p><b>Electricity Trading.</b> LG&amp;E Energy Corp. will receive $16.6 million from the city of Springfield, Ill., City Water, Light &amp; Power Co. in a settlement resolving (just days before the case was to go to trial) a dispute that arose when the city defaulted on an electricity options contract after electricity prices spiked in the Midwest in summer 1998. </p>
<p>The city previously had argued that the contracts were void because the utility did not have proper authority under Illinois law to enter into them. </p>
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</table>
<p><b>Power Markets </b> </p>
<p><b>E-Commerce Regulation.</b> In action that covers not just energy, but all markets, the Federal Trade Commission and U.S. Department of Commerce on Feb. 9 announced a workshop to be held in the spring to explore the use of alternative dispute resolution mechanisms to all consumer transactions "in the borderless online marketplace." </p>
<p>Requests to participate are due March 21. See <a href="http://www.ftc.gov/opa/2000/02/adrrev.htm">www.ftc.gov/opa/2000/02/adrrev.htm</a>. </p>
<p><b>Online Tariffs</b>. New York regulators authorized Central Hudson Gas &amp; Elec. Corp. to dispense with newspaper publication of tariff revisions and convert the company's current tariff into an electronic format with public access via the Internet to all tariffs and tariff changes within 24 hours from date of filing. Case 99-E-1683, Jan. 26, 2000 (N.Y.P.S.C.). </p>
<p><b>Electricity Trading.</b> LG&amp;E Energy Corp. will receive $16.6 million from the city of Springfield, Ill., City Water, Light &amp; Power Co. in a settlement resolving (just days before the case was to go to trial) a dispute that arose when the city defaulted on an electricity options contract after electricity prices spiked in the Midwest in summer 1998. </p>
<p>The city previously had argued that the contracts were void because the utility did not have proper authority under Illinois law to enter into them. </p>
<p><b>Mergers &amp; Acquisitions</b> </p>
<p><b>PUC Review.</b> North Carolina asked for comments on whether to require applicants for merger approval to submit market power studies. With greater consolidation between electric and gas markets, the utility commission said that anticompetitive effects may warrant in-depth investigation. Docket No. M-100, SUB 129, Jan. 28, 2000 (N.C.U.C.). </p>
<p><b>WICOR + Wisconsin Energy.</b> The Wisconsin PSC unanimously has approved the acquisition of WICOR Inc. by Wisconsin Energy Corp., a $1.27 billion deal that will combine the state's largest electric and gas utilities. But the PSC refused to impose a rate cut from resulting merger savings, instead approving a five-year rate freeze starting Jan. 1, 2001, and suggesting it may pass along merger-related savings to customers when it holds a full rate review at the end of the five years. </p>
<p><b>NEES + EUA.</b> Proposed merger partners New England Electric System and Eastern Utilities Associates on Jan. 26 announced a settlement agreement that includes an incentive-based plan allowing customers and the company to share in savings created by the merger and also guarantees Rhode Island's 454,000 electric customers $100 million in savings through 2004. </p>
<p>The agreement gives customers $13 million annually in immediate rate relief, imposes a five-year rate freeze, and doubles the number of low-income customers eligible for reduced rates. </p>
<p><b>El Paso + Coastal Corp.</b> El Paso Energy announced on Jan. 18 that it would purchase Coastal Corp. for $16 billion in stock and assumed debt, making El Paso Energy the world's largest natural gas distributor, and creating a 58,000-mile pipeline system that will reach all of the nation's major growth areas. </p>
<p>El Paso Energy would trade 1.23 common shares for each Coastal share, valuing Coastal shares at $45.66 each - a 27 percent premium over the Jan. 14 closing price of $36. </p>
<p><b>NewEnergy + NEChoice.</b> NewEnergy will acquire New England's leading aggregator of energy customers, NEChoice LLC (aka National Energy Choice). </p>
<p>"We will continue to find the best energy supply deals available anywhere in the market for our customers," said Steven M. Rothstein, managing director of NE Choice. "But, now, we will have the added benefit of NewEnergy's wholesale supply capabilities." </p>
<p><b>UtiliCorp + TransAlta. </b>UtiliCorp United on Feb. 8 announced an agreement to acquire TransAlta Corp.'s Alberta-based electricity distribution and retail assets for $450 million. UtiliCorp said it would keep all of TransAlta's employees engaged in distribution and retail functions, servicing some 350,000 customers through 54,000 miles of low-voltage power distribution lines. </p>
<p>UtiliCorp said the deal would further its strategy of international expansion, noting that it had already "established a presence" in Scandinavia, Germany and Spain. </p>
<p><b>UtiliCorp + Empire,</b> <b>St. Joseph</b>. Missouri regulators denied a motion by Praxair and others to consolidate the two dockets for review of planned mergers between UtiliCorp United and (1) Empire District Electric Co. and (2) St. Joseph Light &amp; Power, saying they "are not so identical" as to warrant only a single case. Case No. EM-2000-369, Feb. 10, 2000 (Mo.P.S.C.). </p>
<p><b>Sierra Pacific + PGE</b>. Sierra Pacific Resources on Jan. 18 applied to the Oregon PUC for approval to purchase Portland General Electric from Enron Corp. and extend a $13.5 million credit to PGE's Oregon customers over 18 months, and assume liability to pay all remaining credits due PGE customers under agreements made by Enron when it bought PGE in 1997. </p>
<p>Sierra Pacific hopes to close the deal by fall, but must win approvals from the Federal Energy Regulatory Commission, the Securities Exchange Commission and the Nuclear Regulatory Commission. On Feb. 2, Sierra Pacific asked the Nevada PUC to waive review of the merger in that state. Docket No. 00-1-31, filed Feb. 2, 2000 (Nev.P.U.C.). </p>
<p><b>MDU Resources + Great Plains NG.</b> MDU Resources Group has agreed to buy Great Plains Natural Gas Co., a closely held utility providing gas distribution service to 19 communities in Minnesota and North Dakota, through 65 miles of high-pressure transmission lines and 435 miles of distribution mains. </p>
<p><b>Transmission &amp; ISOs</b> </p>
<p><b>RTO Formation.</b> The Virginia commission issued new proposed regulations governing the transfer of utility transmission assets to regional transmission entities (RTEs), as is required under state law (Va. Code sec. 56-577) on or before Jan. 1, 2001. </p>
<p>As proposed, the rules would require Virginia utilities to submit applications for transferring grid assets no later than May 1. The state's proposed rules require that every such transfer must "be consistent with the lawful requirements of the Federal Energy Regulatory Commission." Comments were due Feb. 17. Case No. PUE990349, Jan. 11, 2000 (Va.S.C.C.). </p>
<p><b>Asset Allocation.</b> Wisconsin regulators were to conduct an initial prehearing conference on Feb. 14 to identify issues in developing a method to classify electric utility transmission facilities. Case 05-EI-119 (Wisc.P.S.C.). </p>
<p><b>Transmission Pricing.</b> In a rehearing order issued Jan. 4, the Ohio PUC directed electric utilities to minimize transmission rate "pancaking," either by (1) joining a transmission organization that provides a single tariff no higher than license plate pricing (which reflects unbundled grid costs for the utility territory in which the consumer is located), or (2) entering reciprocity agreements with other Ohio utilities through pooling arrangements, or (3) taking other steps. </p>
<p>The PUC said it acted because neither the Midwest Independent System Operator nor the rival Alliance group would be fully operational by the Jan. 1. 2001 deadline for retail choice in Ohio. Case No. 99-1141-EL-ORD, Jan. 4, 2000 (Ohio P.U.C.).</p>
<p>On a second rehearing, the PUC rejected arguments by American Electric Power, FirstEnergy and Cincinnati Gas &amp; Electric that the PUC's anti-pancaking policy conflicted with exclusive federal authority over interstate transmission pricing and was too vague about what "pooling" might require.</p>
<p>However, the PUC made it clear that in barring certain interactions between utilities and their affiliates, it had not intended to prohibit the sharing of information and employees to ensure safety and provide certain centralized operational support functions necessary to maintain reliability. Case No. 99-1141-EL-ORD, Jan. 27, 2000 (Ohio P.U.C.). </p>
<p><b>Power Plants</b> </p>
<p><b>Emissions</b>. The Environmental Protection Agency and Justice Department have pledged to move forward with a lawsuit against TECO Energy Inc., parent company of Tampa Electric, accusing the utility and six others of polluting the air with their coal-fired power plants, in spite of Tampa Electric proffering a settlement calling for it to spend $1 billion over the next 10 years to cut pollution from the plants. </p>
<p>TECO has set aside $3.5 million for potential expenses from the federal lawsuit, which was filed last November, but has declined to say whether the money is earmarked for damages payments. Meanwhile, the utility continues to discuss a settlement with the EPA. </p>
<p><b>Transfers to Affiliates. </b>Michigan regulators gave a conditional OK to Detroit Edison to transfer its 43-year-old but dormant (since 1980) River Rouge Unit 1 power plant to an affiliate, DTE River Rouge No. 1 LLC (to be held as an exempt wholesale generator, for approximately $6.6 million, or twice current net book value, and subject to a different price if pending state legislation that provides for alternative plant valuation methods should be enacted this year). </p>
<p>The plant's output must be offered first to retail marketers participating in retail access programs in Michigan during 2000 and 2001.</p>
<p>Answering interveners who questioned the transfer price, the PSC conceded that "given existing time constraints, which were created by Detroit Edison, a sale of Rouge No. 1 could not be completed in time to provide service during the summer of 2000."</p>
<p>Still, the commission warned that "the threat of blackouts [should] not be used as a bargaining piece¼in the ongoing restructuring of the industry." Case No. U-12266, Feb. 3, 2000 (Mich.P.S.C.). </p>
<p><b>Nuke Plant Decommissioning</b>. Arguing that shareholders should bear the cost, consumer watchdog Citizens Utility Board (CUB) on Jan. 25 asked the Illinois Commerce Commission to block a proposal by Commonwealth Edison to charge customers almost $480 million for funding the decommissioning of the Zion nuclear power plant. </p>
<p>CUB cited a state court ruling that decommissioning costs may only be collected while a plant is in service. Zion was taken out of service in 1997 and shut down permanently in 1998. </p>
<p><b>Fossil Plant Sales</b>. Wyoming regulators authorized PacifiCorp to sell its 47.5 percent interests in the Centralia generating plant and associated coal mine, allocating gain to customers (after gross-up for taxes) through a billing credit paid over two years. Docket No. 20000-EA-99-146, Feb. 10, 2000 (Wyo.P.S.C.). </p>
<p><b>Capacity Sales.</b> Conectiv has signed an agreement to sell 1,875 megawatts of fossil-fired generation and related assets to NRG Energy of Minneapolis, a subsidiary of Northern States Power Co., for $800 million, which Conectiv will use for debt repayment, repurchases of common shares and new investments, including further expanding its mid-merit generation business. Meanwhile, the board of directors has approved an additional 5 million share, open market common stock repurchase program. </p>
<p> </p>
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<p><b>Business Wire </b> </p>
<p><b>Houston Street Exchange</b> will launch one of the first Web exchanges for the trading of crude oil and refined projects at the wholesale level. <b>Equiva Trading Co.</b>, the trading element of the U.S. downstream alliance of <b>Shell Oil, Texaco Inc.</b> and <b>Saudi Aramco</b>, will invest more than $6 million as an equity stake in <b>HoustonStreet</b> to help develop the exchange. The new HoustonStreet oil and products exchange will allow industry traders from any organization to buy and sell crude and refined products in the $1 trillion industry. </p>
<p><b>Azurix Corp</b>. plans to launch <b>Water2Water.com</b>, an Internet-based marketplace for buyers and sellers of water and water-related services to be built on the business-to-business e-commerce platform of <b>Ariba Inc.</b> </p>
<p>Water2Water.com will enable customers to transact business relating to the transfer and physical delivery of water, and to the purchase or sale of water storage and water quality credits. "We believe Water2Water.com ¼ will allow participants in the water market to transact business more efficiently and improve market transparency and price discovery," said Rebecca Mark-Jusbasche, chairman and chief executive officer of Azurix. </p>
<p>Five technology companies are combining their products and expertise to showcase a new state-of-the-art energy trading floor. The initiative brings together <b>Caminus Corp., Syntegra, Automated Power Exchange, TIBCO Software</b>, and <b>Sun Microsystems</b> to present the model energy trading environment to leading energy companies. This demonstration facility was scheduled to open in February at Tower 42 in London, England. The new trading floor will serve as a knowledge and skills development center for companies preparing for the new United Kingdom energy trading arrangements, which are scheduled to be fully operational in October. </p>
<p><b>TradeWeather.com</b> has partnered with <b>WeatherMarkets.com</b> to provide traders with one- to three-month-ahead degree-day forecasts for North America. WeatherMarkets.com, the commodity division of <b>Strategic Weather Services</b>, is making these proprietary forecasts available to TradeWeather.com- registered members on a subscription basis, while also providing free short-range weather forecast graphics to all visitors to TradeWeather.com. </p>
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</table>
<p><b>Business Wire </b> </p>
<p><b>Houston Street Exchange</b> will launch one of the first Web exchanges for the trading of crude oil and refined projects at the wholesale level. <b>Equiva Trading Co.</b>, the trading element of the U.S. downstream alliance of <b>Shell Oil, Texaco Inc.</b> and <b>Saudi Aramco</b>, will invest more than $6 million as an equity stake in <b>HoustonStreet</b> to help develop the exchange. The new HoustonStreet oil and products exchange will allow industry traders from any organization to buy and sell crude and refined products in the $1 trillion industry. </p>
<p><b>Azurix Corp</b>. plans to launch <b>Water2Water.com</b>, an Internet-based marketplace for buyers and sellers of water and water-related services to be built on the business-to-business e-commerce platform of <b>Ariba Inc.</b> </p>
<p>Water2Water.com will enable customers to transact business relating to the transfer and physical delivery of water, and to the purchase or sale of water storage and water quality credits. "We believe Water2Water.com ¼ will allow participants in the water market to transact business more efficiently and improve market transparency and price discovery," said Rebecca Mark-Jusbasche, chairman and chief executive officer of Azurix. </p>
<p>Five technology companies are combining their products and expertise to showcase a new state-of-the-art energy trading floor. The initiative brings together <b>Caminus Corp., Syntegra, Automated Power Exchange, TIBCO Software</b>, and <b>Sun Microsystems</b> to present the model energy trading environment to leading energy companies. This demonstration facility was scheduled to open in February at Tower 42 in London, England. The new trading floor will serve as a knowledge and skills development center for companies preparing for the new United Kingdom energy trading arrangements, which are scheduled to be fully operational in October. </p>
<p><b>TradeWeather.com</b> has partnered with <b>WeatherMarkets.com</b> to provide traders with one- to three-month-ahead degree-day forecasts for North America. WeatherMarkets.com, the commodity division of <b>Strategic Weather Services</b>, is making these proprietary forecasts available to TradeWeather.com- registered members on a subscription basis, while also providing free short-range weather forecast graphics to all visitors to TradeWeather.com. </p>
<p><b>Gas Pipelines</b> </p>
<p><b>Certification Procedures</b>. With commissioner Curt Hébert expressing regret, the FERC modified its statement of policy issued last September on certification for construction of natural gas pipelines and the right of first refusal for shippers with expiring contracts. Docket No. PL-3-001, Feb. 9, 2000, 90 FERC ¶61,128. </p>
<p>Also, the FERC issued a notice of proposed rulemaking (NOPR) aimed at eventually eliminating its procedure for issuance of optional expedited certificates for new pipelines, explaining that its ongoing liberalization of rules for traditional certification under Section 7 of the Natural Gas Act have erased distinctions between the two methods, making the OEC procedure no longer meaningful. Docket No. RM00-5-000 (NOPR), Feb. 9, 2000, 90 FERC ¶61,127.</p>
<p>(Under the OEC procedure, pipelines agree to accept investment risk and therefore need not prove a public need, as under Section 7. However, as the FERC has explained, the OEC procedure is hardly "expedited," as environmental reviews are most responsible for delays, and cannot be avoided under either method.)</p>
<p>In modifying its policy statement, the FERC explained that existing customers should pay the costs of projects designed to improve their service by replacing existing capacity, improving reliability or providing additional flexibility, and should not view higher rates as forcing them to subsidize expansions. Also, shippers will still enjoy a right of first refusal, but now must match bids higher than the maximum cost-based rate under certain circumstances if the pipeline is fully subscribed.</p>
<p>Commissioner Hébert noted that last September the FERC had said that its policy statement would not applied to optional certificates, but expressed hope that the commission would take a cautious approach. </p>
<p><b>Short-term Capacity Markets</b>. In what it described as perhaps its most important natural gas ruling since Order 636, the FERC modified policies regarding short-term rights for pipeline capacity of less than one year's duration. </p>
<p>* Released Capacity. The rule removes the price cap on short-term capacity rights released into the secondary market, but only on an experimental basis for the 30 months ending Sept. 30, 2002, at which time the price cap would go back into effect absent further action.</p>
<p>* Seasonal Rates. Pipelines may charge term-differentiated rates with seasonal pricing to reflect differences in market conditions in peak and off-peak periods. Such rates still must satisfy the revenue and cost-constraint requirements of the traditional regulatory model.</p>
<p>* Capacity Auctions. Allowed on a voluntary basis.</p>
<p>* Segmentation. Rules liberalized to allow more flexibility on delivery and receipt points and segmentation of rights.</p>
<p>* Reporting Requirements. Enlarged to make pricing and capacity availability more transparent. </p>
<p>The FERC added that it was still considering future action on a variety of other issues, such as whether to allow negotiated terms and conditions or broader use of capacity auctions. Docket Nos. RM98-10-000 &amp; RM98-12-000, Order No. 637, Feb. 9, 2000, 90 FERC ¶61,109. </p>
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<p><b>Courts</b> </p>
<p><b>Las Cruces Municipalization.</b> The city of Las Cruces, N.M., won one battle but lost another when a federal appeals court (1) agreed that the FERC in principal could force El Paso Electric Co. to cooperate (both to sell power and grant transmission access) to help the city form its own municipal utility, but then (2) reversed the FERC for failing to consider EPE's complaints that condemnation of EPE facilities in Las Cruces would threaten service to EPE customers located elsewhere. </p>
<p>The court faulted the FERC for saying it was premature to consider the effects of condemnation: "Such purposeful naiveté does a disservice to EPE." El Paso Elec. Co. v. FERC, No. 99-60453, Feb. 9, 2000 (5th Cir.). </p>
<p><b>Gas Pipeline Bypass. </b>The Wyoming Supreme Court upheld a state commission order that granted a certificate to NG Processing Co. to build an in-state natural gas pipeline to bypass a competing interstate pipeline, serve its wholly owned gas utility division and thus "control its destiny," even though NG had begun construction illegally before filing its application. </p>
<p>Said the court, "We see nothing unconscionable in a company trying to buy products at a better price to win over customers from a competitor." Williston Basin Interstate Pipeline Co. v. Wyoming PSC, No. 98-300, Feb. 9, 2000 (Wyo.). </p>
<p><b>Bulk Power Markets.</b> In two separate appeals - one from the FERC, the second from an antitrust court order - a federal appeals court largely denied claims by the town of Norwood that it suffered discrimination and a "price squeeze" when New England Electric Service (Norwood's wholesale power supplier under a cost-based, all-requirements contract) sold off its nonnuclear generation to USGen and the FERC then allowed New England Power Co. (a NEES subsidiary) to offer bulk power discounts only to its affiliates (Massachusetts Electric Co. and Narragansett Electric), but at the same time froze rates to Norwood at higher cost-based levels and forced the town to pay a stiff charge for early contract termination. </p>
<p>The court remanded the antitrust case to consider whether the sale by NEES violated the Clayton Act, since PG&amp;E (parent company of buyer USGen) already owned some nearby (New York) power plants and might gain too large a share of regional generation. Town of Norwood v. FERC, No. 98-2198, Feb. 2, 1000; Town of Norwood v. New England Power Co. (antitrust case), No. 99-1047, Feb. 2, 2000 (1st Cir.). </p>
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</table>
<p><b>Courts</b> </p>
<p><b>Las Cruces Municipalization.</b> The city of Las Cruces, N.M., won one battle but lost another when a federal appeals court (1) agreed that the FERC in principal could force El Paso Electric Co. to cooperate (both to sell power and grant transmission access) to help the city form its own municipal utility, but then (2) reversed the FERC for failing to consider EPE's complaints that condemnation of EPE facilities in Las Cruces would threaten service to EPE customers located elsewhere. </p>
<p>The court faulted the FERC for saying it was premature to consider the effects of condemnation: "Such purposeful naiveté does a disservice to EPE." El Paso Elec. Co. v. FERC, No. 99-60453, Feb. 9, 2000 (5th Cir.). </p>
<p><b>Gas Pipeline Bypass. </b>The Wyoming Supreme Court upheld a state commission order that granted a certificate to NG Processing Co. to build an in-state natural gas pipeline to bypass a competing interstate pipeline, serve its wholly owned gas utility division and thus "control its destiny," even though NG had begun construction illegally before filing its application. </p>
<p>Said the court, "We see nothing unconscionable in a company trying to buy products at a better price to win over customers from a competitor." Williston Basin Interstate Pipeline Co. v. Wyoming PSC, No. 98-300, Feb. 9, 2000 (Wyo.). </p>
<p><b>Bulk Power Markets.</b> In two separate appeals - one from the FERC, the second from an antitrust court order - a federal appeals court largely denied claims by the town of Norwood that it suffered discrimination and a "price squeeze" when New England Electric Service (Norwood's wholesale power supplier under a cost-based, all-requirements contract) sold off its nonnuclear generation to USGen and the FERC then allowed New England Power Co. (a NEES subsidiary) to offer bulk power discounts only to its affiliates (Massachusetts Electric Co. and Narragansett Electric), but at the same time froze rates to Norwood at higher cost-based levels and forced the town to pay a stiff charge for early contract termination. </p>
<p>The court remanded the antitrust case to consider whether the sale by NEES violated the Clayton Act, since PG&amp;E (parent company of buyer USGen) already owned some nearby (New York) power plants and might gain too large a share of regional generation. Town of Norwood v. FERC, No. 98-2198, Feb. 2, 1000; Town of Norwood v. New England Power Co. (antitrust case), No. 99-1047, Feb. 2, 2000 (1st Cir.). </p>
<p>Clarification. To clarify a Jan. 1 report in News Digest (see "Electric Restructuring," p. 8), Baltimore Gas &amp; Electric on July 1 will transfer all generation assets to unregulated subsidiaries of its parent company, Constellation Energy Group. </p>
<p>Correction. In the Jan. 15 issue, News Digest included an error concerning Allegheny Energy and its subsidiary, West Penn Power. It should have reported that on Nov. 16, Allegheny Energy announced the sale by West Penn Power of $600 million in transition bonds to help form an unregulated generating subsidiary. We regret the error.</p>
<p>News Digest was compiled by Carl J. Levesque, associate editor, Lori Burkhart and Phillip Cross, contributing legal editors, and Bruce W. Radford, editor-in-chief. For more frequent updates, see <a href="http://www.pur.com">www.pur.com</a>.</p>
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<a href="/tags/aif">AIF</a><span class="pur_comma">, </span><a href="/tags/allegheny-energy">Allegheny Energy</a><span class="pur_comma">, </span><a href="/tags/american-electric-power">American Electric Power</a><span class="pur_comma">, </span><a href="/tags/baltimore-gas-electric">Baltimore Gas &amp; Electric</a><span class="pur_comma">, </span><a href="/tags/bc">BC</a><span class="pur_comma">, </span><a href="/tags/billing">Billing</a><span class="pur_comma">, </span><a href="/tags/central-maine-power">Central Maine Power</a><span class="pur_comma">, </span><a href="/tags/citi">Citi</a><span class="pur_comma">, </span><a href="/tags/cmp">CMP</a><span class="pur_comma">, </span><a href="/tags/commission">Commission</a><span class="pur_comma">, </span><a href="/tags/constellat">Constellat</a><span class="pur_comma">, </span><a href="/tags/constellation">Constellation</a><span class="pur_comma">, </span><a href="/tags/constellation-energy">Constellation Energy</a><span class="pur_comma">, </span><a href="/tags/cost">Cost</a><span class="pur_comma">, </span><a href="/tags/delmarva-power">Delmarva Power</a><span class="pur_comma">, </span><a href="/tags/detroit-edison">Detroit Edison</a><span class="pur_comma">, </span><a href="/tags/economy">Economy</a><span class="pur_comma">, </span><a href="/tags/el-paso-electric">El Paso Electric</a><span class="pur_comma">, </span><a href="/tags/empire-district-electric">Empire District Electric</a><span class="pur_comma">, </span><a href="/tags/empire-district-electric-co">Empire District Electric Co.</a><span class="pur_comma">, </span><a href="/tags/environmental-protection-agency">Environmental Protection Agency</a><span class="pur_comma">, </span><a href="/tags/epa">EPA</a><span class="pur_comma">, </span><a href="/tags/epe">EPE</a><span class="pur_comma">, </span><a href="/tags/federal-energy-regulatory-commission">Federal Energy Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/ferc">FERC</a><span class="pur_comma">, </span><a href="/tags/firstenergy">FirstEnergy</a><span class="pur_comma">, </span><a href="/tags/florida-psc">Florida PSC</a><span class="pur_comma">, </span><a href="/tags/ge">GE</a><span class="pur_comma">, </span><a href="/tags/general-electric">General Electric</a><span class="pur_comma">, </span><a href="/tags/iso">ISO</a><span class="pur_comma">, </span><a href="/tags/lge">LG&amp;E</a><span class="pur_comma">, </span><a href="/tags/maine-puc">Maine PUC</a><span class="pur_comma">, </span><a href="/tags/maryland-psc">Maryland PSC</a><span class="pur_comma">, </span><a href="/tags/nee">NEE</a><span class="pur_comma">, </span><a href="/tags/new-england-electric-system">New England Electric System</a><span class="pur_comma">, </span><a href="/tags/new-york-independent-system-operator">New York Independent System Operator</a><span class="pur_comma">, </span><a href="/tags/new-york-psc">New York PSC</a><span class="pur_comma">, </span><a href="/tags/new-york-state-electric-gas">New York State Electric &amp; Gas</a><span class="pur_comma">, </span><a href="/tags/newenergy">NewEnergy</a><span class="pur_comma">, </span><a href="/tags/niagara-mohawk-power">Niagara Mohawk Power</a><span class="pur_comma">, </span><a href="/tags/nopr">NOPR</a><span class="pur_comma">, </span><a href="/tags/nrg">NRG</a><span class="pur_comma">, </span><a href="/tags/nrg-energy">NRG Energy</a><span class="pur_comma">, </span><a href="/tags/nuclear">Nuclear</a><span class="pur_comma">, </span><a href="/tags/nuclear-regulatory-commission">Nuclear Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/ohio-edison">Ohio Edison</a><span class="pur_comma">, </span><a href="/tags/order-no-637">Order No. 637</a><span class="pur_comma">, </span><a href="/tags/pacificorp">PacifiCorp</a><span class="pur_comma">, </span><a href="/tags/pge">PG&amp;E</a><span class="pur_comma">, </span><a href="/tags/portland-general-electric">Portland General Electric</a><span class="pur_comma">, </span><a href="/tags/regulation">Regulation</a><span class="pur_comma">, </span><a href="/tags/rto">RTO</a><span class="pur_comma">, </span><a href="/tags/said">SAID</a><span class="pur_comma">, </span><a href="/tags/saidi">SAIDI</a><span class="pur_comma">, </span><a href="/tags/saifi">SAIFI</a><span class="pur_comma">, </span><a href="/tags/shell">Shell</a><span class="pur_comma">, </span><a href="/tags/storage">storage</a><span class="pur_comma">, </span><a href="/tags/tampa-electric">Tampa Electric</a><span class="pur_comma">, </span><a href="/tags/tariffs">Tariffs</a><span class="pur_comma">, </span><a href="/tags/teco-energy">TECO Energy</a><span class="pur_comma">, </span><a href="/tags/transmission">Transmission</a><span class="pur_comma">, </span><a href="/tags/wisconsin-energy-corp">Wisconsin Energy Corp.</a><span class="pur_comma">, </span><a href="/tags/wisconsin-psc">Wisconsin PSC</a> </div>
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Wed, 15 Mar 2000 05:00:00 +0000puradmin10635 at https://www.fortnightly.com